What is a 'Claim' as it relates to dispute resolution for Craters & Freighters franchisees?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything to the contrary, Franchisor and Franchisee will each have the right in a proper case to obtain temporary or preliminary injunctive relief from a court of competent jurisdiction in connection with any Claim; provided, however, that the parties must contemporaneously submit their dispute involving such Claim for mediation and arbitration on the merits in accordance with Section 23.2 and Section 23.3, respectively.
Franchisee agrees that Franchisor may have such temporary or preliminary injunction relief, without bond, but upon due notice, and Franchisee's sole remedy in the event of the entry of such injunctive relief will be the dissolution of such injunctive relief, if warranted, upon hearing duly had (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby).
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters FDD, a 'Claim' refers to any dispute between the franchisor and franchisee that may lead to legal action. Specifically, both Craters & Freighters and its franchisees have the right to seek temporary or preliminary injunctive relief from a court to address any Claim. However, if either party pursues such injunctive relief, they must also simultaneously submit the underlying dispute for mediation and arbitration.
This means that if a Craters & Freighters franchisee has a disagreement with the franchisor, such as a breach of contract, trademark infringement, or any other issue, either party can ask a court to issue an order to protect their interests while the dispute is being resolved through mediation and arbitration. For example, Craters & Freighters could seek an injunction to prevent a franchisee from using its trademarks improperly, or a franchisee could seek an injunction to prevent Craters & Freighters from violating the terms of the franchise agreement.
Notably, Craters & Freighters can obtain temporary or preliminary injunctive relief without providing a bond, although with due notice to the franchisee. If a franchisee believes the injunction was wrongly issued, their only recourse is to seek its dissolution through a hearing; they expressly waive any right to claim damages resulting from the injunction's issuance. This aspect could pose a risk to franchisees, as they may incur costs and other damages due to an injunction, without being able to recover those losses even if the injunction is later found to be unwarranted.