Does the restriction on requiring controversies to be referred to a person apply to arbitration before an independent arbitrator for Desi District franchisees in Indiana?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
- (5) Requiring the franchisee to prospectively assent to a release, assignment, novation, waiver, or estoppel which purports to relieve any person from liability to be imposed by the Indiana Deceptive Franchise Practices Act or requiring any controversy between the franchisee and the franchisor to be referred to any person, if referral would be binding on the franchisee.
This subsection (5) does not apply to arbitration before an independent arbitrator.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the restriction on requiring controversies between the franchisee and the franchisor to be referred to any person does not apply to arbitration before an independent arbitrator for franchisees in Indiana.
This means that while Desi District cannot mandate that disputes be resolved by a specific individual or entity outside of formal arbitration, this limitation does not extend to independent arbitrators. An Indiana Desi District franchisee can engage in arbitration with an independent arbitrator without violating the Indiana Deceptive Franchise Practices Act.
This exception allows for a structured and impartial dispute resolution process through arbitration, providing a clear avenue for resolving conflicts while adhering to Indiana's franchise regulations. This ensures that franchisees are not unduly influenced by referrals to biased parties but can still utilize arbitration for dispute resolution.