If the arbitration clause doesn't apply, how are disputes with Cream resolved?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
FICERS, 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.
We and you agree that, in any arbitration arising as described herein, the arbitrator shall have full authority to manage any necessary exchange of information among the parties with a view to achieving an efficient and economical resolution of the dispute.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a court or arbitrator determines that the arbitration clause is unenforceable, disputes will be resolved in a judicial proceeding. This means that instead of going to arbitration, the parties would pursue the matter in a court of law. The specific procedures and venue for such judicial proceedings would be determined by the dispute resolution provisions outlined in the franchise agreement.
Cream specifies that the prevailing party in any judicial or arbitration proceeding is entitled to recover all damages, costs, and expenses, including arbitration and court costs, and reasonable attorneys' fees from the other party. This clause aims to ensure that the party who wins the legal battle is compensated for the financial burden of pursuing the case.
Prospective Cream franchisees should carefully review the dispute resolution provisions within the franchise agreement to understand their rights and obligations in case a disagreement arises. It is important to note that the agreement also states that the rights of both Cream and the franchisee are cumulative, meaning that exercising one right or remedy does not prevent either party from pursuing other available legal avenues.