Under the Counselor Realty franchise agreement, where will arbitration take place?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
10. RESOLUTION OF DISPUTES.
- 10.1 Arbitration. Except as provided below, any dispute arising under or in relation to this Agreement shall be resolved by binding arbitration by the National Center for Dispute Settlement, under its rules for expedited commercial arbitration, in Minneapolis, Minnesota. Each claim or controversy will be arbitrated by Franchisee on an individual basis, and will not be consolidated in any arbitration action with the claim of any other franchisee. The award of the arbitrators is final and binding on all parties. The arbitrators may issue appropriate orders as well as award monetary (but not exemplary or punitive) damages. The prevailing party will be entitled to recover its costs including its reasonable attorneys' fees. We may sue to collect money owed to us, to protect or enforce our rights in the Marks, or to compel inspections or audits.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, any dispute arising from the franchise agreement will be resolved through binding arbitration. The arbitration will be conducted by the National Center for Dispute Settlement, following its rules for expedited commercial arbitration. The location for the arbitration is specified as Minneapolis, Minnesota.
This means that if a Counselor Realty franchisee has a disagreement with the franchisor that cannot be resolved informally, the dispute will be settled through arbitration rather than in court. The arbitration process will be managed by the National Center for Dispute Settlement, and the hearings will take place in Minneapolis, Minnesota, regardless of where the franchisee's office is located. This could involve travel expenses for the franchisee if they are not located near Minneapolis.
The arbitrator's decision is final and binding, although the arbitrator is limited to awarding monetary damages and cannot award exemplary or punitive damages. The prevailing party in the arbitration is entitled to recover their costs, including reasonable attorney's fees. Counselor Realty retains the right to sue a franchisee in court to collect money owed, protect their trademarks, or compel inspections or audits.
It is fairly common in franchise agreements to include mandatory arbitration clauses. This is intended to provide a faster and more cost-effective means of dispute resolution compared to litigation. However, franchisees should be aware that arbitration typically involves relinquishing the right to a jury trial and that the location of the arbitration may add to the cost of resolving disputes.