27. DISPUTE RESOLUTION

27.1 Choice of Law. Except to the extent this Agreement or any particular dispute is governed by the U.S. Trademark Act of 1946 or other federal law, this Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia (without reference to its conflict of laws principles), excluding any law regulating the sale of franchises or governing the relationship between a franchisor and franchisee, unless the jurisdictional requirements of such laws are met independently without reference to this Section. References to any law refer also to any successor laws and to any published regulations for such law, as in effect at the relevant time. References to a governmental agency also refer to any regulatory body that succeeds the function of such agency.

27.2 Dispute Resolution and Venue for Disputes.

• (i) Internal Dispute Resolution. In recognition of the strain on time, unnecessary expense and wasted resources potentially associated with litigation and/or arbitration, and in the spirit of cooperation, the parties pledge to try to resolve any dispute amicably, without litigation or arbitration. Accordingly, Franchisee must first bring any claim or dispute between Franchisee and Franchisor to Franchisor's Chief Executive Officer, after providing notice as set forth in Section 26 of this Agreement, and make every effort to resolve the dispute internally. Franchisee must exhaust this internal dispute resolution procedure before Franchisee may bring Franchisee's dispute before a third party. This agreement to first attempt resolution of disputes internally shall survive termination or expiration of this Agreement.
• (ii) Non-Binding Mediation. Unless otherwise provided in this Agreement, and with the exception of injunctive relief or specific performance actions, before the filing of any litigation, Franchisee and Franchisor agree to mediate any dispute, controversy or claim between Franchisor and/or

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)