What law governs all matters relating to arbitration for Cream?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you agree that all controversies, disputes, or claims between us or any of our affiliates, and our and their respective owners, officers, directors, agents, and employees, on the one hand, and you and your owners, guarantors, affiliates, and employees, on the other hand, arising out of or related to: (1) this Agreement or any other agreement between you (or any of your owners) and us (or any of our affiliates); (2) our relationship with you; (3) the scope or validity of this Agreement or any other agreement between you (or any of your owners) and us (or any of our affiliates) or any provision of any of such agreements (including the validity and scope of this arbitration provision, which is to be determined by an arbitrator, not a court); or (4) any System Standard, must be submitted for binding arbitration, on demand of either party, to the American Arbitration Association (the "AAA"). The arbitration proceedings will be conducted by one arbitrator and, except as this Section otherwise provides, according to the AAA's then-current Commercial Arbitration Rules. All proceedings will be conducted at a suitable location chosen by the arbitrator that is within 50 miles of our or, as applicable, our successor's or assign's then-current principal place of business (currently, Columbus, Ohio). All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.). The interim and final awards of the arbitrator shall be final and binding upon each party, and judgment upon the arbitrator's awards may be entered in any court of competent jurisdiction.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) governs all matters relating to arbitration. This means that any disputes between Cream and its franchisees that go to arbitration will be subject to the rules and regulations outlined in this federal law.
This is a fairly standard clause in franchise agreements. Arbitration is a common method of dispute resolution, and the Federal Arbitration Act provides a consistent legal framework for these proceedings. It covers aspects like the enforcement of arbitration agreements, the powers of arbitrators, and the review of arbitration awards.
For a prospective Cream franchisee, this means understanding the implications of the Federal Arbitration Act is crucial. While the FDD specifies that arbitration will be handled by the American Arbitration Association (AAA) and conducted within 50 miles of Cream's principal place of business (Columbus, Ohio), the Federal Arbitration Act ultimately provides the legal basis for the entire process. Franchisees should familiarize themselves with this law to understand their rights and obligations in case of a dispute with Cream.