What rules govern the arbitration proceedings for Pearce Bespoke disputes?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
proceed with the arbitration of all arbitrable claims, counterclaims, or defenses or to proceed to litigate all claims, counterclaims, or defenses in a court having competent jurisdiction.
C. Punitive Damages.
Franchisor and Franchisee acknowledge that judgment upon an arbitration award may be entered in any court of competent jurisdiction and will be binding, final, and not appealable. Franchisor and Franchisee (and their respective owners and guarantors, if applicable) agree to waive, to the fullest extent permitted by law, the right to or claim for any punitive or exemplary damages against the other and agree that in the event of a dispute between them, each will be limited to the recovery of actual damages sustained by it.
D. Enforcement of Franchise Agreement.
Notwithstanding the other provisions of this Section 19, Franchisee recognizes that the failure of a single franchisee to comply with the terms of its Pearce Bespoke Franchise Agreement would cause irreparable harm to Franchisor or to some or all other Pearce Bespoke franchisees.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, several rules govern arbitration proceedings between the franchisor and franchisee. Franchisees and Pearce Bespoke agree that any judgment made during arbitration is binding, final, and not appealable in a court of law. Both parties also waive their rights to claim punitive or exemplary damages against each other, limiting recovery to actual damages sustained.
In any arbitration or court action, the non-prevailing party is responsible for covering all costs and expenses, including reasonable attorney's fees, incurred by the prevailing party. This encourages both parties to present well-supported cases and potentially discourages frivolous claims, as the financial burden of losing could be significant.
However, the FDD also includes an addendum required by the state of Illinois. This addendum states that no franchisee shall be required to litigate any cause of action, with the exception of arbitration proceedings, arising under the Franchise Agreement or the Act outside of the State of Illinois.
For prospective Pearce Bespoke franchisees, these stipulations mean that while arbitration is the likely route for dispute resolution, they should be prepared to potentially cover the legal costs of Pearce Bespoke if they do not prevail in the arbitration. Franchisees should also be aware of the Illinois addendum if their franchise is located in Illinois.