Who bears the costs and expenses of arbitration in a Dryject dispute?

According to Dryject's 2025 Franchise Disclosure Document, the costs and expenses of arbitration, including the arbitrator's compensation, are borne by the non-prevailing party. This means that if a Dryject franchisee loses the arbitration case, they will be responsible for covering these costs. Conversely, if Dryject loses, the company will bear these expenses.

This arrangement can significantly impact a franchisee's decision to pursue arbitration. A franchisee considering arbitration must carefully weigh the potential costs against the likelihood of success. If the franchisee has a weak case, they risk not only losing the dispute but also incurring substantial arbitration expenses.

It is important to note that the arbitrator is to be selected in accordance with the American Arbitration Association (AAA) rules, must have practiced law for at least ten years, and must have franchise law experience. The arbitrator is expected to apply the Federal Rules of Civil Procedure and the Federal Rules of Evidence where possible to streamline the administrative procedure. The arbitration will be conducted in the city and state where Dryject maintains its principal place of business, which is currently Hatboro, Pennsylvania.

This clause incentivizes both parties to carefully assess the merits of their claims before initiating arbitration and encourages them to seek a resolution through other means, such as negotiation or mediation, to avoid the risk of incurring arbitration costs. Franchisees should consult with an attorney to fully understand the implications of this clause and to evaluate their options in case of a dispute with Dryject.