Shake Shack’s new terms force customers into private arbitration.
Fast-food chain Shake Shack has joined a growing number of companies limiting customer access to the courts. The restaurant’s updated terms of use now require customers to agree to binding arbitration and waive their right to join class-action lawsuits, effectively blocking most traditional legal recourse. By accepting these terms — often buried in small print when ordering through an app, kiosk, or website — customers must settle disputes through private arbitration instead of public court proceedings.
The change mirrors a larger pattern spreading across the restaurant and tech industries. Arbitration agreements have become a quiet but powerful tool for corporations, shielding them from collective lawsuits over issues like food safety, deceptive advertising, or data misuse. In arbitration, cases are handled by privately hired judges rather than public courts, and the odds heavily favor corporations. Studies have found that companies win the vast majority of these disputes — as many as nine out of ten — while consumers rarely recover damages.
Until recently, such clauses were more common in employment contracts, allowing companies to restrict workers’ ability to sue. Now, with the rise of mobile ordering and digital platforms, these restrictions are extending to customers. Shake Shack’s updated terms link arbitration to its online and app-based services, meaning that anyone who places an order through those channels automatically agrees to the policy. Those who refuse to sign are left with one option — ordering in person at the counter — a method many restaurants are gradually phasing out.
Industry observers note that this shift coincides with an aggressive push toward digitization. Companies encourage app-based ordering because it increases efficiency, cuts labor costs, and generates valuable consumer data. Once a restaurant app gains access to a customer’s phone, it can track purchases, monitor preferences, and use algorithms to shape pricing. The new system benefits corporate profits but leaves consumers more exposed — not only to higher prices but also to fewer rights if something goes wrong.
Critics argue that the arbitration model amounts to a privatized justice system. While companies promote it as a faster and cheaper alternative to court, most cases are resolved behind closed doors, with little transparency or accountability. Advocates for consumer rights warn that the practice discourages legitimate complaints and prevents patterns of misconduct from coming to light. In public court, class-action lawsuits can reveal industry-wide problems, but in arbitration, each dispute is isolated, keeping systemic issues hidden.
Shake Shack’s decision follows similar moves by other large corporations, including ticketing services, tech firms, and other fast-food brands. The approach has drawn attention from lawmakers and watchdog organizations who say consumers are being forced into unfair contracts without full awareness of what they are signing.
For many customers, the implications are significant. If a case arises — such as a foodborne illness outbreak or product contamination — affected individuals will not be able to band together to hold the company publicly accountable. Instead, they must navigate private legal channels designed to favor business interests.
The change highlights how digital convenience has come with hidden trade-offs. The same tools that make ordering faster and more personal also serve as gateways for companies to limit responsibility and expand surveillance. As more consumers rely on apps for everyday purchases, the line between restaurant and tech company continues to blur, raising new questions about privacy, fairness, and access to justice.
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