Can the arbitrator declare any Mark generic or invalid during a Face Foundrie arbitration?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator appointed must have at least ten (10) years' experience in franchising or franchise law, and the arbitrator will be instructed that he or she must follow the substantive law and the other requirements, waivers, and limitations of this Agreement. The arbitrator will have no authority to add, delete, or modify in any manner the terms and provisions of this Agreement. All findings, judgments, decisions, and awards of the arbitrator will be limited to the dispute or controversy set forth in the written demand for arbitration and response to that demand. The arbitrator may not award any relief that was not specifically requested by the parties before the start of the arbitration hearing, and the arbitrator may not declare any Mark generic or otherwise invalid or, except as expressly provided in this Agreement below, award any punitive, exemplary or multiple damages against either party (Franchisor and Area Developer hereby waiving to the fullest extent permitted by law, except as expressly provided in this Agreement below, any right to or claim for any punitive, exemplary or multiple damages against the other). The arbitrator will have the right to award or include in any award the specific performance of this Agreement, but will be required to file a reasoned brief with his or her award.
Source: Item 23 — RECEIPTS (FDD pages 74–257)
What This Means (2025 FDD)
According to the 2025 Face Foundrie FDD, the arbitrator in a dispute is specifically prohibited from declaring any of Face Foundrie's marks as generic or invalid. This limitation is explicitly stated within the conditions governing the arbitration process.
This restriction means that a franchisee cannot argue in arbitration that Face Foundrie's trademarks are unenforceable due to becoming generic or otherwise invalid. The arbitrator's decisions must adhere to the agreement's terms, and they cannot modify or delete any provisions. The arbitrator's authority is confined to the specific dispute presented in the arbitration demand and response, and they cannot grant relief not requested by either party at the start of the hearing.
This clause protects Face Foundrie's brand identity and trademarks. It ensures that the validity of the brand's intellectual property cannot be challenged in arbitration, maintaining consistency and control over its brand assets. Franchisees should be aware of this limitation as it affects their ability to dispute trademark issues within the arbitration framework.