Franchise RelationsArbitration

Section § 20040

Explanation

This law allows franchisors and franchisees to choose to settle their disputes through binding arbitration, either before or after any issues arise. However, to do so, the arbitration process must meet certain standards set by the chapter, and the arbitrators must be impartial and selected from reputable sources like the American Arbitration Association.

Nothing contained in this chapter shall limit the right of a franchisor and franchisee to agree before or after a dispute has arisen to binding arbitration of claims under this chapter, provided that:
(a)CA Business & Professions Code § 20040(a) The standards applied in such arbitration are not less than the requirements specified in this chapter; and
(b)CA Business & Professions Code § 20040(b) The arbitrator or arbitrators employed in such arbitration are chosen from a list of impartial arbitrators supplied by the American Arbitration Association or other impartial person.
franchisor franchisee binding arbitration