Under the Moes Southwest Grill franchise agreement, where will arbitration proceedings be held?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement shall at all times be governed by the laws of the State of Georgia. Should there be a dispute between Company and Customer relating in any way to the Agreement, the breach of the Agreement, or the business relationship of the parties, the parties agree that they will make a good faith effort to settle the dispute in an amicable manner. If the parties are unable to settle the dispute through direct discussions, at that time they will attempt to settle the dispute by mediation administered by the American Arbitration Association (the "AAA"). If the parties do not agree to pursue mediation or if that procedure is unsuccessful, the dispute will be resolved by binding arbitration administered by AAA in accordance with its Commercial Arbitration Rules using a single arbitrator, at a location selected by AAA based on the convenience of the parties and the location of potential witnesses. The arbitrator shall have the authority to award specific performance and any other appropriate remedies including interim injunctive relief to maintain the status quo pending the conclusion of arbitration. The prevailing party shall also be entitled to recover its reasonable attorneys' fees and other costs and expenses of litigation. A judgment on the award of the arbitrator may be entered in any court with jurisdiction. The foregoing will not preclude any party from bringing an action for injunction in a court of competent jurisdiction for breach of the other party's confidentiality obligations.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, disputes that cannot be settled through mediation will be resolved through binding arbitration. The arbitration will be administered by the American Arbitration Association (AAA) in accordance with its Commercial Arbitration Rules, utilizing a single arbitrator. The location for the arbitration will be selected by the AAA based on the convenience of both parties and the location of potential witnesses.
This means that if a Moe's Southwest Grill franchisee has a dispute with the company that cannot be resolved through informal discussions or mediation, they will be required to submit to binding arbitration. The location of the arbitration is not fixed but will be determined by the AAA to accommodate both parties and witnesses, which could potentially involve travel and associated costs for the franchisee.
The arbitrator is authorized to award specific performance and other appropriate remedies, including interim injunctive relief to maintain the status quo during the arbitration process. The prevailing party in the arbitration is entitled to recover reasonable attorneys' fees and other costs and expenses of litigation, which could be a significant financial consideration. The arbitration award can be entered as a judgment in any court with jurisdiction, making it legally binding. However, the agreement does not prevent either party from seeking an injunction in a court of competent jurisdiction for breaches of confidentiality.
It is important for prospective Moe's Southwest Grill franchisees to understand this dispute resolution process, as it dictates how disagreements with the franchisor will be handled. Arbitration is generally faster and less expensive than traditional litigation, but it also involves limitations on discovery and appeal. Franchisees should consider the potential costs and logistical challenges associated with arbitration, including the possibility of having to travel for hearings, when evaluating the franchise opportunity.