Can the arbitral tribunal amend or modify the terms of the Delta Hotels By Marriott Agreement?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
The decision of the arbitral tribunal will be final and binding on the parties and will be enforceable in any courts having jurisdiction.
The arbitral tribunal will have no authority to amend or modify the terms of this Agreement.
The arbitral tribunal will have the right to award or include in its award any relief it deems proper, including money damages and interest on unpaid amounts, specific performance and legal fees and costs in accordance with this Agreement; however, the arbitral tribunal may not award punitive, consequential or exemplary damages (except for those related to misuse of Franchisor's Intellectual Property).
The costs and expenses of arbitration will be allocated and paid by the parties as determined by the arbitral tribunal.
- C.
Any arbitration proceeding under this Agreement will be conducted on an individual (not a class-wide) basis and will not be consolidated with any other arbitration proceedings to which Franchisor is a party, except that Franchisor may join any current or former owner under an owner agreement related to the Hotel in any such proceeding.
Any Dispute to be settled by arbitration under this Section will at the request of any party to this Agreement be resolved in a single arbitration before a single tribunal together with any Dispute arising out of or relating to any other agreement between such parties or Franchisor's Affiliates.
Source: Item 11 — FINANCING OF THE HOTEL (FDD pages 259–279)
What This Means (2025 FDD)
According to the 2025 Delta Hotels By Marriott Franchise Disclosure Document, the arbitral tribunal does not have the authority to amend or modify the terms of the agreement. However, the arbitral tribunal has the right to award relief it deems proper, including money damages, interest on unpaid amounts, specific performance, and legal fees and costs in accordance with the agreement. The arbitral tribunal, however, may not award punitive, consequential, or exemplary damages, except for those related to misuse of the Franchisor's Intellectual Property. The costs and expenses of arbitration will be allocated and paid by the parties as determined by the arbitral tribunal.
This means that while a franchisee can seek various forms of compensation and legal recourse through arbitration, the arbitrator's power is limited to interpreting the existing agreement and cannot rewrite or change its terms. This is a standard practice in franchising, as the franchise agreement is a legally binding document that both parties are expected to adhere to.
For a prospective Delta Hotels By Marriott franchisee, this limitation is important to understand. It highlights the need to carefully review and understand the franchise agreement before signing, as the terms cannot be altered through arbitration. If a franchisee believes certain terms are unfair or need modification, they must address these concerns during the negotiation phase before entering into the agreement. Once the agreement is in place, the arbitrator's role is to enforce the existing terms, not to change them.
Furthermore, the FDD states that any arbitration proceeding will be conducted on an individual basis and will not be consolidated with other arbitration proceedings, except that the Franchisor may join any current or former owner under an owner agreement related to the Hotel in any such proceeding. Also, any Dispute to be settled by arbitration will at the request of any party be resolved in a single arbitration before a single tribunal together with any Dispute arising out of or relating to any other agreement between such parties or Franchisor's Affiliates.