What is the designated forum for litigation of Augusta Lawn Care franchise disputes?
Augusta_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Abraham Bilgoray v. Mike Andes, Augusta Franchise LLC, Augusta Franchise LLC Suite, and Augusta Lawn Care Corporation, Civil Action No. 7:25-cv-00584, pending in the United States District Court for the Southern District of New York (originally filed in the Supreme Court of New York, Rockland County, on December 16, 2024 and removed to federal court on January 21, 2025). Plaintiff is a former franchisee of Augusta Lawn Care that alleges fraud and negligent
misrepresentation, based on a purported non-receipt of Augusta's pre-signing Franchise Disclosure Document (the "FDD"). Plaintiff therefore seeks rescission of contracts and restitution. Augusta moved to stay, transfer, and/or dismiss on multiple grounds, including: (i) Plaintiff's franchise agreement requires that he bring any claim before the American Arbitration Association ("AAA"); (ii) to the extent Plaintiff was not required to file his claim in the AAA, he was required to file suit in the United States District Court for the Western District of Washington; (iii) Plaintiff's claims are deficient under the Federal Rules of Civil Procedure; (iv) Plaintiff's fraud-based claims are without merit under the applicable documents; and (v) the applicable statute(s) of limitations bar Plaintiff's claims. Augusta denies any liability and is confident it will prevail in the litigation and recoup its attorneys' fees and costs incurred.
Other than the foregoing, no litigation is required to be disclosed in this Item.
11.9 Exceptions to Arbitration and Mediation
- 11.9.1 Notwithstanding the provisions of Sections 11.7 and 11.8 of this Agreement, Augusta Lawn Care shall be entitled, with a bond of not more than $10,000, to the entry of temporary, preliminary and permanent injunctions, and orders of specific performance, enforcing the provisions of this Agreement in any court of competent jurisdiction relating to: (a) Your, and/or any of Your Related Party's use of the Marks; (b) Your confidentiality covenants (Section 8); (c) Your obligations upon termination or expiration of the franchise; or (d) Transfer or assignment by You. If Augusta Lawn Care secures any such injunction (i.e. temporary restraining order, preliminary injunction, or permanent injunction) or order of specific performance, you agree to pay to Augusta Lawn Care an amount equal to the aggregate of Augusta Lawn Care's costs of obtaining such relief including, without limitation, reasonable attorneys' fees, costs of investigation and proof of facts, court costs, other litigation expenses, travel and living expenses, and any damages incurred by Augusta Lawn Care as a result of the breach of any such provision.
- 11.9.2 Further, at the election of Augusta Lawn Care or its affiliate, the mediation and arbitration provisions of Sections 11.7 and 11.8, inclusive of all subparts, shall not apply to: (a) any claim by Augusta Lawn Care relating to your failure to pay any fee due to Augusta Lawn Care under this Agreement; and/or (b) any claim by Augusta Lawn Care or its affiliate relating to use of the Proprietary Marks and/or the System, including, without limitation, claims for violations of the Lanham Act; and/or (c) any claim by Augusta Lawn Care relating to a breach of your confidentiality obligations under this Agreement.
If a court or arbitrator determines that this limitation on joinder of, or class action certification of claims is unenforceable then the agreement to arbitrate the dispute will be null and void and the parties must submit all claims to the jurisdiction of the courts in accordance with Section 11.8. The arbitration must take place in Whatcom County, Washington, or at such other location as Augusta Lawn Care designates.
- 11.8.4 The arbitrator must follow the law and not disregard the terms of this Agreement.
The arbitrator may not consider any settlement discussions or offers that might have been made by either you or Augusta Lawn Care.
The arbitrator may not, under any circumstance, (a) stay the effectiveness of any pending termination of this Agreement, (b) assess punitive or exemplary damages, (c) certify a class or a consolidated action, or (d) make any award which extends, modifies or suspends any lawful term of this Agreement, or any reasonable standard of business performance that Augusta Lawn Care sets.
The arbitrator will have the right to make a determination as to any procedural matters as would a court of competent jurisdiction be permitted to make in the state in which the main office of Augusta Lawn Care is located.
The arbitrator will also decide any factual, procedural, or legal questions relating in any way to the dispute between the parties, including, but not limited to, any decision as to whether Section 11.8 is applicable and enforceable as against the parties, subject matter, timeliness, scope, remedies, unconscionability, and any alleged fraud in the inducement.
- 11.8.5 The arbitrator can issue summary orders disposing of all or part of a claim, and provide for temporary restraining orders, preliminary injunctions, injunctions, attachments, claim and delivery proceedings, temporary protective orders, receiverships, and other equitable and/or interim/final relief.
Each party consents to the enforcement of such orders, injunctions, etc., by any court having jurisdiction.
- 11.8.6 The arbitrator will have subpoena powers limited only by the laws of the State of Washington.
AMENDMENT TO THE FRANCHISE AGREEMENT REQUIRED BY THE STATE OF MARYLAND
If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control.
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- This franchise agreement provides that disputes are resolved through arbitration. A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 32–35)
What This Means (2025 FDD)
According to the 2025 FDD, Augusta Lawn Care's franchise agreement mandates that any claims be brought before the American Arbitration Association (AAA). However, there are exceptions. In a case involving a former franchisee, Augusta Lawn Care argued that if the AAA was not the required forum, then the suit should be filed in the United States District Court for the Western District of Washington. This indicates a preference for arbitration or, alternatively, litigation in a specific federal court.
Section 11.8 of the Franchise Agreement details the arbitration process. The arbitration must occur in Whatcom County, Washington, or another location designated by Augusta Lawn Care. The arbitrator is bound by the law and the terms of the agreement, with specific limitations on their powers, such as not being able to stay terminations, assess punitive damages, or certify class actions. The arbitrator can issue summary orders and grant various forms of relief, including injunctions.
Despite the arbitration clause, Augusta Lawn Care retains the right to seek injunctive relief or specific performance in any court of competent jurisdiction for issues related to the use of trademarks, confidentiality, obligations upon termination, or transfer/assignment. Additionally, Augusta Lawn Care can elect to exclude claims related to unpaid fees, use of proprietary marks/systems, or breaches of confidentiality from the mediation and arbitration provisions. These exceptions allow Augusta Lawn Care to pursue certain legal actions in court rather than through arbitration.
The Maryland addendum to the franchise agreement notes a potential conflict between the agreement's arbitration clause and Maryland franchise law, which states that requiring a franchisee to waive their right to file a lawsuit in Maryland is an unfair practice. This suggests that the enforceability of the arbitration clause may vary depending on state laws and could be subject to legal challenges. A prospective franchisee should consult with a legal professional to understand the implications of these clauses and their enforceability in their specific jurisdiction.