Under the 7 Brew franchise agreement, what organization handles the arbitration process?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
ARBITRATION. The third sentence of Section 21.F of the Franchise Agreement is amended to read as follows: All proceedings, including the hearing, will be conducted at a suitable location that is within ten (10) miles of where we have our (or, in the case of a transfer by us, the then-current franchisor has its) principal business address when the arbitration demand is filed, provided, however, that to the extent required by the North Dakota Franchise Investment Law (unless such a requirement is preempted by the Federal Arbitration Act), arbitration proceedings will be held at a site to which we and you agree.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document does not specify a particular organization that handles the arbitration process for 7 Brew. However, it does state that the arbitration proceedings will be held at a location within ten miles of the franchisor's principal business address when the arbitration demand is filed. An exception exists for franchisees in North Dakota, where the proceedings will be held at a site agreed upon by both parties, to the extent required by the North Dakota Franchise Investment Law, unless such a requirement is preempted by the Federal Arbitration Act.
This means that for most 7 Brew franchisees, arbitration will likely occur near the 7 Brew headquarters. For prospective franchisees, this could mean incurring travel costs to attend arbitration hearings if they live far from the headquarters. The North Dakota exception provides some protection for franchisees in that state, ensuring a more convenient location for arbitration if state law requires it and federal law does not override it.
It is important for potential franchisees to understand the implications of the arbitration clause, including the location of proceedings and any potential costs associated with travel and legal representation. Franchisees should seek clarification from 7 Brew regarding the typical arbitration process and whether they utilize a specific arbitration organization. Understanding these details can help a franchisee prepare for potential disputes and associated expenses.