What happens to claims that are not submitted or filed as required in a Cream arbitration?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you agree to be bound by the provisions of any applicable contractual or statutory limitations provision, whichever expires earlier. We and you further agree that, in any arbitration proceeding, each party must submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding. Any claim which is not submitted or filed as required will be forever barred. The arbitrator may not consider any settlement discussions or offers that might have been made by either you or us.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a party fails to submit or file a claim that constitutes a compulsory counterclaim as defined by Rule 13 of the Federal Rules of Civil Procedure within the same arbitration proceeding, that claim will be permanently barred. This means that franchisees and Cream must ensure all relevant claims are presented during the arbitration.
This requirement emphasizes the importance of thorough preparation and diligence in pursuing or defending against claims in arbitration. Franchisees need to be aware of the Federal Rules of Civil Procedure, specifically Rule 13, to identify any potential compulsory counterclaims they may have against Cream. Failure to do so could result in the loss of the ability to assert those claims in the future.
This provision aims to promote efficiency and finality in dispute resolution. By requiring all related claims to be brought in a single proceeding, Cream seeks to avoid piecemeal litigation and ensure that all issues between the parties are resolved comprehensively. Franchisees should consult with legal counsel to fully understand their rights and obligations under this arbitration provision and to ensure that all potential claims are properly asserted.