Are there any limitations provisions that Cream and the franchisee must adhere to during 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.
WE AND YOU AGREE THAT ARBITRATION WILL BE CONDUCTED ON AN INDIVIDUAL BASIS AND THAT A PROCEEDING REQUIRED UNDER THIS SECTION TO BE SUBMITTED TO ARBITRATION MAY NOT BE: (1) CONDUCTED ON A CLASS-WIDE BASIS; (2) COMMENCED, CONDUCTED OR CONSOLIDATED WITH ANY OTHER ARBITRATION PROCEEDING; (3) JOINED WITH ANY SEPARATE CONTROVERSY, DISPUTE OR CLAIM OF AN UNAFFILIATED THIRD-PARTY; OR (4) 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. The parties may only serve reasonable requests for documents, which must be limited to documents upon which a party intends to rely or documents that are directly relevant and material to a significant disputed issue in the case or to the case's outcome. The document requests shall be restricted in terms of time frame, subject matter and persons or entities to which the requests pertain and shall not include broad phraseology such as "all documents directly or indirectly related to." You and we further agree that no interrogatories or requests to admit shall be propounded unless the parties later mutually agree to their use.
The provisions of this Section are intended to benefit and bind certain third party nonsignatories. The provisions of this Section will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, both Cream and the franchisee are subject to several limitations during arbitration. They must adhere to any applicable contractual or statutory limitations, with the earlier expiration date taking precedence.
Furthermore, any claim that would be considered a compulsory counterclaim under Rule 13 of the Federal Rules of Civil Procedure must be submitted within the same arbitration proceeding; failure to do so results in the claim being permanently barred. The arbitrator is prohibited from considering any settlement discussions or offers made by either party.
Arbitration will be conducted on an individual basis, meaning it cannot be conducted on a class-wide basis, consolidated with other proceedings, joined with third-party claims, or brought by an association or agent on the franchisee's behalf. The arbitrator has the authority to manage the exchange of information to ensure an efficient and economical resolution, with document requests limited to relevant documents and excluding broad requests. Interrogatories or requests to admit are not allowed unless mutually agreed upon. These provisions benefit and bind third-party nonsignatories and remain in effect even after the agreement expires or terminates.