What relief can the arbitrator award in a Learningrx arbitration case?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
for arbitration made hereunder. The parties shall each select one arbitrator and the two selected arbitrators shall select a single arbitrator to hear the matter. The parties' consent to the use of the services of Judicial Arbitration Group, Inc. or its successor or the American Arbitration Association to administer the arbitration. The arbitration shall be conducted in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association. 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. The award and decision of the arbitrator will be conclusive and binding upon all parties and their respective owners, managers, employees, and agents. Judgment
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, an arbitrator in a dispute has the authority to award various forms of relief. This includes monetary damages, with interest applied to unpaid amounts from their due date. The arbitrator can also order specific performance, which compels a party to fulfill their contractual obligations. Injunctive relief, a court order that requires a party to do or cease doing a specific action, is also within the arbitrator's power. Additionally, the arbitrator can award attorneys' fees and costs to the prevailing party.
However, there are limitations to the arbitrator's power. The document explicitly states that the arbitrator cannot award any party more than $50,000 in damages, including both costs and attorneys' fees. Furthermore, the arbitrator is not allowed to grant any damages or awards that are barred by the "Limitation of Claims" section of the Learningrx franchise agreement. This means that certain types of claims or damages may be excluded from the arbitration process altogether.
It is also important to note that the arbitrator cannot amend or modify the terms of the Learningrx franchise agreement. The arbitrator's decision must adhere to the plain meaning of the agreement. The arbitrator is expected to issue an award within 90 days of the commencement of the arbitration hearing, unless the parties involved agree to a different timeline. This dispute resolution clause remains in effect even after the termination or expiration of the franchise agreement.
For a prospective Learningrx franchisee, this means that while arbitration offers a means of resolving disputes, the potential financial recovery is capped at $50,000, and certain claims may be entirely excluded. This limitation could be a significant factor in deciding whether to pursue arbitration, especially if the potential damages exceed this amount. Franchisees should carefully review the "Limitation of Claims" section to understand what types of claims are restricted.