Can an arbitration proceeding against Cream be consolidated with any other arbitration proceeding?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
WE AND YOU AGREE THAT ARBITRATION WILL BE CONDUCTED ON AN INDIVIDUAL BASIS AND THAT AN ARBITRATION PROCEEDING BETWEEN US AND ANY OF OUR AFFILIATES, OR OUR AND THEIR RESPECTIVE SHAREHOLDERS, OFFICERS, DIRECTORS, AGENTS, AND EMPLOYEES, ON THE ONE HAND, AND YOU (OR YOUR OWNERS, GUARANTORS, AFFILIATES, AND EMPLOYEES), ON THE OTHER HAND, MAY NOT BE: (I) CONDUCTED ON A CLASS-WIDE BASIS; (II) COMMENCED, CONDUCTED, OR CONSOLIDATED WITH ANY OTHER ARBITRATION PROCEEDING; (III) JOINED WITH ANY SEPARATE CLAIM OF AN UNAFFILIATED THIRD-PARTY; OR (IV) 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. Specifically, any arbitration proceeding between Cream (including its affiliates, owners, officers, directors, agents, and employees) and the franchisee (including their owners, guarantors, affiliates, and employees) cannot be consolidated with any other arbitration proceeding. This means each dispute must be handled separately.
This prevents a franchisee from joining their arbitration case with other franchisees who may have similar grievances against Cream. The aim is to ensure each case is evaluated on its own merits without being influenced by other potentially related disputes. This requirement applies to disputes arising from the franchise agreement, the relationship between Cream and the franchisee, or the validity of the agreement itself.
However, there is an exception. If a court or arbitrator determines that the clause preventing consolidation is unenforceable, then the agreement to arbitrate does 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. This ensures that if the no-consolidation clause is deemed invalid, the parties still have a mechanism to resolve their dispute, albeit in a court rather than through arbitration.