In a dispute about changes to a systemwide brand fund, a California federal district court granted a franchisor’s motion to compel arbitration and stayed the case pending the arbitrator’s decision on whether the franchisee’s claims must be arbitrated. Helpsource of N. Shore, Inc. v. CK Franchising, Inc., 2026 WL 3079284 (C.D. Cal. Oct. 14, 2026). HelpSource of North Shore, Inc., a Comfort Keepers franchisee, sued CK Franchising, Inc. (CKFI), the operator of the Comfort Keepers franchise system, in federal court concerning changes to the system’s brand fund contributions. CKFI moved to compel arbitration, citing the parties’ franchise agreement, which required that all disputes except for certain enumerated categories must proceed through negotiation, mediation, and ultimately binding arbitration. HelpSource opposed the motion, arguing that the court should determine whether the exceptions applied.
The California federal district court granted CKFI’s motion. It found that the franchise agreement’s arbitration exceptions did not override the parties’ clear delegation of arbitrability questions to the arbitrator. In doing so, the court noted that, under the FAA, a court’s role is generally limited to (1) determining whether a valid agreement to arbitrate exists and (2) whether the agreement covers the dispute at issue. The court acknowledged that, although courts may decide gateway questions of arbitrability, parties may also delegate those gateway questions to the arbitrator if they clearly and unmistakably agree to do so. In this instance, the court determined that the parties’ franchise agreement specifically provided that disputes concerning the enforceability of the arbitration provision and the arbitrability of a dispute would be decided by an arbitrator. The court noted, however, that the court retained authority to decide HelpSource’s motion for a preliminary injunction because requests for preliminary relief to a court were expressly permitted by the arbitration provision.