What relief is the arbitrator entitled to award in a dispute involving Moes Southwest Grill?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Individual Actions. We and you agree that arbitration will be conducted on an individual, not a class-wide, basis and that an arbitration proceeding between us and you may not be consolidated with any other arbitration proceeding between us and any other person. Notwithstanding the foregoing or anything to the contrary in this Section 19.1, if any court or arbitrator determines that this prohibition on class-wide arbitration is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 19.1, then the parties agree that this arbitration clause shall not apply to that dispute and that such dispute will be resolved in a judicial proceeding in accordance with Section 19.1.D. (Excepted Disputes).
- C. Relief. The arbitrator has the right to award or include in his or her award any relief which he or she deems proper, including money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and attorneys' fees and costs, provided that
the arbitrator may not declare any Mark generic or otherwise invalid or, except as expressly provided in Section 19.1.F. (Waiver of Punitive Damages), award any special, consequential, exemplary, or punitive damages against either party (we and you hereby waiving to the fullest extent permitted by law, except as expressly provided in Section 19.1.F. below, any right to or claim for any special, consequential, exemplary, or punitive damages against the other).
- D. Excepted Disputes. The following disputes will not be resolved through arbitration unless we consent to arbitration: (i) disputes that arise under or are related to the Lanham Act, as now or later amended; (ii) disputes that otherwise relate to the ownership or validity of any of the Intellectual Property; (iii) disputes that involve enforcement of our intellectual property rights or protection of our Confidential Information or Trade Secrets; or (iv) disputes related to the payment of sums you owe us or our affiliates.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, in disputes subject to arbitration, the arbitrator has broad authority to determine appropriate relief. This includes the power to award money damages, with interest accruing on unpaid amounts from the date they were due. The arbitrator can also order specific performance, compelling a party to fulfill their contractual obligations, and issue injunctive relief, which can be used to prevent a party from taking certain actions. Additionally, the arbitrator can award attorneys' fees and costs to the prevailing party.
However, there are limitations to the arbitrator's power. The arbitrator cannot declare any of Moe's Southwest Grill's marks generic or invalid. Furthermore, the arbitrator is generally prohibited from awarding special, consequential, exemplary, or punitive damages against either party. This means that while direct financial losses can be compensated, indirect or speculative damages are typically not recoverable. There are exceptions to this waiver of punitive damages, specifically related to indemnification for third-party claims, infringement of intellectual property, and breaches of confidentiality obligations.
The interest rate that the arbitrator may apply to damages is subject to certain constraints. It must be no less than 2.5% per annum above the Citibank Preference Rate quoted for the corresponding periods, as reported in The Wall Street Journal, or the maximum rate permitted by applicable law, whichever is less. This ensures a fair rate of interest on any awarded damages, compensating the prevailing party for the time value of money. The decision and award of the arbitrator will be final, conclusive, and binding on all parties, and judgment on the award may be entered in any court of competent jurisdiction.
Prospective franchisees should be aware of these provisions as they outline the scope of potential remedies and limitations in case of a dispute with Moe's Southwest Grill. Understanding the types of relief available and the restrictions on damages can help franchisees assess the potential risks and benefits of entering into a franchise agreement. It is also important to note the exceptions to the waiver of punitive damages, as these could significantly impact the outcome of certain types of disputes.