Can a Cream arbitration be joined with any separate controversy, dispute, or claim of an unaffiliated third party?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
WE AND YOU AGREE THAT ARBITRATION WILL BE CONDUCTED ON AN INDIVIDUAL BASIS AND THAT A PROCEEDING REQUIRED UNDER THIS SECTION TO BE SUBMITTED TO ARBITRATION MAY NOT BE: (1) CONDUCTED ON A CLASS-WIDE BASIS; (2) COMMENCED, CONDUCTED OR CONSOLIDATED WITH ANY OTHER ARBITRATION PROCEEDING; (3) JOINED WITH ANY SEPARATE CONTROVERSY, DISPUTE OR CLAIM OF AN UNAFFILIATED THIRD-PARTY; OR (4) BROUGHT ON YOUR BEHALF BY ANY ASSOCIATION OR AGENT. Notwithstanding the foregoing, if any court or arbitrator determines that all or any part of the preceding sentence is unenforceable with respect to a dispute, controversy or claim that otherwise would be subject to arbitration under this Section, then all parties agree that this arbitration clause shall not apply to that dispute, controversy or claim and that such dispute, controversy or claim shall be resolved in a judicial proceeding in accordance with the dispute resolution provisions of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, arbitration proceedings are to be conducted on an individual basis. This means that any arbitration between Cream (including its affiliates, shareholders, officers, directors, agents, and employees) and a franchisee (or their owners, guarantors, affiliates, and employees) cannot be joined with any separate claim of an unaffiliated third party.
This restriction ensures that each dispute is handled separately, preventing the complexities and potential delays that could arise from combining multiple unrelated claims into a single arbitration. This also applies to disputes involving Cream and its affiliates, owners, officers, directors, agents and employees versus the franchisee and their owners, guarantors, affiliates and employees.
However, the FDD also states that if any court or arbitrator determines that the prohibition on joining claims with unaffiliated third parties is unenforceable, then the agreement to arbitrate will not apply to that specific dispute. In such cases, the dispute will be resolved in a judicial proceeding as per the agreement's dispute resolution provisions.