Does the Desi District franchise agreement specify which arbitration rules will be used?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
emnitee may elect to assume the defense of any Action subject to this indemnification, and control all aspects of defending the Action, including negotiations and settlement, at Franchisee's expense. Such an undertaking shall not diminish Franchisee's obligation to indemnify the Indemnitees.
ARTICLE 17. DISPUTE RESOLUTION
17.1 Arbitration.
- (a) Disputes Subject to Arbitration. Except as expressly provided in subsection (c) and (d), any controversy or claim between the parties (including any controversy or claim arising out of or relating to this Agreement or its formation and including any question of arbitrability) shall be resolved by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, including the Optional Rules for Emergency Measures of Protection. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction.
- (b) Location. The place of arbitration shall be the city and state where Desi District Franchise Group's headquarters are located.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the franchise agreement specifies that any disputes between the parties will be resolved through arbitration. Specifically, the arbitration will be administered by the American Arbitration Association (AAA). The rules that will be used are the AAA's Commercial Arbitration Rules, including the Optional Rules for Emergency Measures of Protection.
This means that if a Desi District franchisee has a dispute with the franchisor, it will be handled outside of the court system, through a binding arbitration process overseen by the AAA. This process is generally faster and less expensive than traditional litigation. However, the decision of the arbitrator is typically final and binding, with limited rights to appeal.
The location for the arbitration will be the city and state where Desi District Franchise Group's headquarters are located. It is fairly common in franchising for the arbitration to occur at the franchisor's headquarters, which could create a cost burden for the franchisee. Franchisees should be aware of this and factor in potential travel costs if a dispute arises. The agreement also specifies that both parties must continue to perform their obligations under the agreement during the arbitration process, unless the agreement has been terminated.