Under what circumstances is the joinder of other parties permitted in an arbitration between Fat Shack and the franchisee?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
another arbitration of any kind, nor shall Franchisee attempt to certify a class or participate as a party in a class action against the other.
- b. The foregoing notwithstanding, in the event Franchisee controls, is controlled by or is in active concert with another franchisee, distributor, or area developer of FSI, or there is a guarantor of some or all of the Franchisee's obligations to FSI, then the joinder of those parties to any arbitration between FSI and Franchisee shall be permitted, and in all events, the joinder of an owner, director, officer, manager, partner or other representative or agent of Franchisee shall be permitted.
- c. Franchisee agrees that no claims may be brought on its behalf or on behalf of any of the Franchisee Affiliates by any third party, including but not limited to any association representing Franchisee.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, there are specific circumstances under which the joinder of other parties is permitted in an arbitration between Fat Shack and a franchisee. Generally, the franchisee cannot consolidate their arbitration with another arbitration or participate in a class action against Fat Shack.
However, if the franchisee controls, is controlled by, or is in active concert with another Fat Shack franchisee, distributor, or area developer, then the joinder of those parties to any arbitration between Fat Shack and the franchisee is permitted. Additionally, the joinder of an owner, director, officer, manager, partner, or other representative or agent of the franchisee is also permitted in any arbitration between Fat Shack and the franchisee.
This clause ensures that Fat Shack can resolve disputes efficiently while also protecting its interests by allowing for the inclusion of related parties in certain situations. It prevents franchisees from circumventing the arbitration agreement by involving third parties unless those parties have a direct and significant relationship with the franchisee or the franchise operation.