Can an arbitration proceeding between The Standardx and a franchisee be consolidated with any other arbitration proceeding?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Hyatt and Franchisee agree that arbitration will be conducted on an individual, not a class-wide, basis; that only Hyatt and Franchisee (and/or their respective Related Parties, as applicable) may be the parties to any arbitration proceedings described in this Section 14.1; and that an arbitration proceeding between Hyatt and Franchisee (and/or their respective Related Parties) may not be consolidated with any other arbitration proceeding between Hyatt and any other person or entity. Notwithstanding the foregoing or anything to the contrary in this Section 14.1 or Section 18.2, if any court or arbitrator determines that all or any part of the preceding sentence is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 14.1, then all parties agree that this arbitration clause shall not apply to that dispute and that such dispute shall be resolved in a judicial proceeding in accordance with this ARTICLE XIV (excluding this Section 14.1).
Despite this Section 14.1, Hyatt and Franchisee each have the right to seek temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction; provided, however, that Hyatt and Franchisee must contemporaneously submit the dispute for arbitration on the merits as provided in this Section 14.1. The provisions of this Section 14.1 are intended to benefit and bind certain third party non-signatories and will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination.
Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, arbitration proceedings between The Standardx and a franchisee cannot be consolidated with other arbitration proceedings. The FDD specifies that arbitration is to be conducted on an individual basis, involving only The Standardx and the franchisee. This means a franchisee cannot join their arbitration case with other franchisees or parties.
This restriction on consolidating arbitration proceedings ensures that each dispute between The Standardx and its franchisees is handled separately. This prevents a single arbitration case from becoming a class-wide action. For a prospective franchisee, this means that if they have a dispute with The Standardx that requires arbitration, they must pursue it independently and cannot combine their case with similar cases from other franchisees.
However, the document also states that if a court or arbitrator determines that the prohibition against consolidation is unenforceable, then the agreement to arbitrate the dispute becomes void. In this case, the dispute will be resolved in a judicial proceeding. Despite the arbitration agreement, both The Standardx and the franchisee retain the right to seek temporary restraining orders and preliminary injunctive relief from a court, provided that the dispute is simultaneously submitted for arbitration.