In Learningrx franchise disputes, can the arbitrator award attorney's fees?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator will have the right to award any proper relief, including money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief and attorneys' fees and costs; provided, however, the Parties expressly agree that the arbitrator may not award any Party more than Fifty Thousand and 00/100 Dollars ($50,000.00) in damages, including costs and attorneys' fees, and provided however, the arbitrator will not be empowered to award, nor will any party be entitled to receive, any damages or awards that are barred by the "Limitation of Claims" Section of this Agreement.
If Franchisor enforces this Agreement by judicial process, as provided in the first sentence of this Section 16.1, each Party's damages shall also be limited to a maximum of Fifty Thousand and 00/100 Dollars ($50,000.00), including costs and attorneys' fees.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, the arbitrator has the right to award attorney's fees and costs in dispute resolutions. However, the arbitrator cannot award any party more than $50,000 in damages, including costs and attorney's fees. The arbitrator is not empowered to award any damages or awards barred by the "Limitation of Claims" section of the agreement.
This means that if a Learningrx franchisee and the franchisor have a dispute that goes to arbitration, the arbitrator can order the losing party to pay the winning party's attorney's fees. However, there is a cap of $50,000 on the total amount of damages, including attorney's fees, that can be awarded. This limitation could impact the franchisee's ability to fully recover their legal expenses if the dispute is complex and costly to litigate.
Furthermore, the FDD specifies that the arbitrator's decision must follow the plain meaning of the agreement and that the arbitrator cannot amend or modify the terms of the agreement. The arbitrator must issue an award no later than 90 days after the commencement of the arbitration hearing unless the parties agree otherwise. This clause ensures that the arbitration process is conducted within a reasonable timeframe and that the arbitrator's decision is based on the contract's terms.
If Learningrx enforces the agreement through judicial process, each party's damages are also limited to a maximum of $50,000, including costs and attorney's fees. This provision creates a consistent limitation on potential damages, regardless of whether the dispute is resolved through arbitration or judicial process. This limitation on damages could be a significant factor for prospective franchisees to consider when evaluating the potential financial risks associated with the franchise agreement.