How many arbitrators will conduct the arbitration proceedings 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, arbitration proceedings will be conducted by one arbitrator. This process is initiated if either Cream or the franchisee demands it, and it is managed by the American Arbitration Association (AAA). The proceedings adhere to the AAA's Commercial Arbitration Rules, with the location selected by the arbitrator within 50 miles of Cream's principal business location, which is currently Columbus, Ohio. The Federal Arbitration Act governs all arbitration-related matters.
This means that any disputes arising from the franchise agreement, the relationship between Cream and the franchisee, or the validity of the agreement will be resolved by a single, neutral arbitrator rather than through court litigation. The arbitrator's decisions are binding, and judgments can be enforced in any competent court. This process aims to provide a more efficient and cost-effective resolution compared to traditional court proceedings.
However, the arbitrator's authority is limited. They cannot declare Cream's trademarks as generic or invalid, nor can they award punitive or exemplary damages against either party. The arbitrator can, however, award other forms of relief, including monetary damages, interest, legal fees, and specific performance. The prevailing party in the arbitration is entitled to recover costs and attorney's fees, adding an incentive for parties to act reasonably during the process.