Are all issues pertaining to the arbitrability of a controversy or claim related to the Dog Haus agreement subject to binding arbitration?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
tor shall be shared equally by Franchisor and Area Developer. The mediator shall be disqualified as a witness, expert or counsel for any Party with respect to the dispute and any related matter. Mediation is a compromise negotiation and shall constitute privileged communications under California and other Applicable Laws. The entire mediation process shall be confidential and the conduct, statements, promises, offers, views and opinions of the mediator and Franchisor and Area Developer shall not be discoverable or admissible in any legal proceeding for any purpose; provided, however, that evidence which is otherwise discoverable or admissible shall not be excluded from discovery or admission as a result of its use in the mediation. Notwithstanding anything to the contrary set forth in this Agreement, any Party that fails to reasonably cooperate in scheduling and completing a mediation within forty-five (45) days after giving or receiving notice thereof shall be precluded from recovering costs, expenses, and/or prevailing party attorneys' fees in any subsequent legal action.
- 15.2 Arbitration. Except as set forth in Sections 15.2.5 and 15.5, if the Parties cannot fully resolve and settle a dispute through mediation as set forth in Section 15.1, all unresolved claims between Franchisor and Area Developer arising out of or relating to this Agreement, the rights and obligations of the Parties to this Agreement, any alleged breach of this Agreement, any issues pertaining to the arbitrability of such controversy or claim, and any claims or causes of action related to the making, interpretation, or performance of either Party under this Agreement, shall be submitted to binding arbitration. Arbitration shall be conducted before one arbitrator in accordance with the then-current rules of the AAA unless Franchisor and Area Developer agree on another arbitration organization to conduct the arbitration proceeding.
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, any issues regarding whether a claim can be arbitrated are subject to binding arbitration. Specifically, if mediation fails to resolve a dispute between Dog Haus and an Area Developer, all unresolved claims are subject to binding arbitration. This includes disputes relating to the agreement, the rights and obligations of both parties, any alleged breach of the agreement, and any issues concerning whether the controversy or claim is eligible for arbitration.
This means a prospective Dog Haus franchisee must understand that disagreements will first go through mediation. If mediation is unsuccessful, the franchisee is obligated to resolve the dispute through binding arbitration rather than through the court system. This process covers a wide range of potential issues, ensuring that most conflicts are handled outside of court.
The arbitration will be conducted before a single arbitrator, following the rules of the American Arbitration Association (AAA), unless both Dog Haus and the Area Developer agree to use a different arbitration organization. The location for arbitration is Los Angeles, California. The agreement emphasizes that the Federal Arbitration Act governs all issues related to arbitrability and enforcement, regardless of any state law specified for governing and construing the agreement.
It is important for a potential Dog Haus franchisee to recognize that the arbitrator cannot modify or change certain key provisions of the agreement, such as the method of operation, the authorized product line, or monetary obligations. The agreement to arbitrate is self-executing, meaning that if either party fails to attend a properly noticed arbitration proceeding, an award can be issued against them even in their absence. This underscores the importance of participating in the arbitration process once it has begun.