What is the role of the arbitrator in the proceeding against Spray Net Canada?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
9202137 Canada Inc. and its principal Patricia Joyce v. Spray-Net Canada, Inc. and Carmelo Marsala (collectively, "SN Canada"), Arbitration Proceeding. In or around February 2019, a former franchisee of SN Canada commenced this proceeding alleging that the Franchise Disclosure Document disclosed by SN Canada was materially deficient seeking rescission and corresponding damages. SN Canada has filed its response to the former franchisee's notice of arbitration, and the parties are currently waiting for an arbitrator to be assigned. SN Canada intends to continue vigorously defending against this proceeding on the grounds that the former franchisee's claims are without merit.
Source: Item 3 — LITIGATION (FDD page 13)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, in an arbitration proceeding commenced by a former franchisee against Spray-Net Canada, the parties are waiting for an arbitrator to be assigned. The former franchisee alleges that the Franchise Disclosure Document disclosed by Spray-Net Canada was materially deficient and is seeking rescission and corresponding damages.
The role of the arbitrator will be to preside over the arbitration process. Arbitration is a form of alternative dispute resolution where a neutral third party, the arbitrator, hears evidence and arguments from both sides and then makes a decision, which can be binding or non-binding depending on the agreement between the parties.
For a prospective Spray Net franchisee, this litigation highlights the importance of carefully reviewing the Franchise Disclosure Document (FDD) and understanding its contents before investing in a franchise. It also demonstrates that disputes can arise between a franchisor and franchisee, and that arbitration is one potential avenue for resolving such disputes. Spray Net Canada intends to defend vigorously against the proceeding, suggesting that the company is prepared to contest the claims made by the former franchisee.