Does the arbitration clause apply to disputes involving shareholders of Golden Krust Caribbean Restaurant?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
Except for controversies, disputes or claims related to our based on your use of the Marks after the expiration or termination of this Agreement, all controversies, disputes or claims between us and our shareholders, officers, directors, agents and employees and you (your owners, guarantors, affiliates and employees, if applicable) arising out of or related to:
- (1) This Agreement or any other agreement between you and us or any other provision of any such agreement;
- (2) Our relationship with you;
- (3) The validity of this agreement or any other agreement between you and us or any provision of any such agreement; or
- (4) Any system standard relating to the establishment or operation of the Restaurant will be submitted for arbitration to the White Plains, New York office of the American Arbitration Association on demand of either party. Such arbitration proceedings will be conducted in White Plains, New York and, except as otherwise provided in this Agreement, will be heard by one arbitrator in accordance with the then current commercial arbitration rules of the American Arbitration Association. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. § § 1 se seq.) and not by any state arbitration law.
The arbitrator will have the right to award or include in his award any relief which he deems proper in the circumstances, including, without limitation, money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief and attorneys' fees and costs, provided that the arbitrator will not have the right to declare any mark generic or otherwise invalid or, except as otherwise provided in Paragraph I of this Section, to award exemplary or punitive damages. The award and decision of the arbitrator will be conclusive and binding upon all parties hereto, and judgment upon the award may be entered in any court of competent jurisdiction.
Notwithstanding anything to the contrary contained in this paragraph, we and you each have the right in a proper case to obtain temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction; provided, however, that we and you must contemporaneously submit our dispute for arbitration on the merits as provided herein.
This franchise agreement provides that disputes are resolved through arbitration.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, the arbitration clause for Golden Krust Caribbean Restaurant applies to disputes involving shareholders. Specifically, the clause covers controversies, disputes, or claims between Golden Krust Caribbean Restaurant and its shareholders, officers, directors, agents, and employees, and the franchisee, including their owners, guarantors, affiliates, and employees. This encompasses disputes arising out of or related to the Franchise Agreement, any other agreement between the franchisee and Golden Krust Caribbean Restaurant, the relationship between the parties, the validity of agreements, or any system standard relating to the establishment or operation of the restaurant.
This means that if a franchisee or Golden Krust Caribbean Restaurant has a dispute with a shareholder of the other party related to the franchise agreement or the operation of the restaurant, the dispute will be subject to arbitration. The arbitration will take place in White Plains, New York, and will be conducted according to the American Arbitration Association's commercial arbitration rules. The arbitrator can award various forms of relief, including money damages, specific performance, injunctive relief, and attorneys' fees and costs, but cannot declare any mark generic or award exemplary or punitive damages, except as otherwise provided in the agreement.
This arbitration clause is governed by the Federal Arbitration Act, ensuring that disputes are resolved through arbitration rather than in court. However, both parties retain the right to seek temporary restraining orders and preliminary injunctive relief from a court of competent jurisdiction, provided that they also submit the dispute for arbitration on the merits. Franchisees should be aware of this clause and understand that it mandates arbitration for most disputes, which can affect their legal rights and options.