For Ledgers arbitration, what condition must be met before conducting any discovery or hearings?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
If a Matter cannot be resolved through Mediation, then you must submit the Matter to arbitration in accordance with the rules of the AAA.
Your attorney must include in your demand for arbitration an estimate for legal fees ("Budget") necessary to establish liability and damages. The Budget will include the maximum number of: a) witness, b) experts and c) documents. The Arbitrator will evaluate the Budget for proportionality to the Cure. The Budget must be approved by the Arbitrator, before conducting any discovery, or hearings. The Arbitrator must approve any increases in the Budget.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, if a matter cannot be resolved through mediation, it must be submitted to arbitration in accordance with the rules of the American Arbitration Association (AAA). Before any discovery or hearings can take place, the franchisee's attorney must include an estimate for legal fees (the "Budget") necessary to establish liability and damages in the demand for arbitration.
The Budget must specify the maximum number of witnesses, experts, and documents. The arbitrator will then evaluate the Budget for proportionality to the cure (the action requested to resolve the matter).
Importantly, the arbitrator must approve the Budget before any discovery or hearings can proceed, and any increases to the Budget must also be approved by the arbitrator. This process is designed to ensure that the costs of arbitration are reasonable and proportionate to the issue at hand, potentially protecting both the franchisee and Ledgers from excessive legal fees.