Where must arbitration be conducted for disputes related to a B Bops franchise?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
| T. Integration/merger clause | Section 26 | Only the terms of the Development Agreement, the documents referred to in and the attachments to the Development Agreement are binding. Any other oral or written promises related to the subject matter of the Development Agreement may not be enforceable. This is not intended to disclaim any representations made in this disclosure document. |
|---|---|---|
| U. Dispute resolution by arbitration or mediation | Section 17 | Except for certain claims related to use of the Licensed Marks or proprietary information, all disputes must be arbitrated in Des Moines, Iowa. |
| V. Choice of forum2 | Section 17 | Arbitration must be commenced in the State of Iowa. |
| W. Choice of law2 | Section 25 | Iowa law applies (subject to state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–49)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, disputes arising from the Development Agreement, except for certain claims related to the use of licensed marks or proprietary information, must be arbitrated in Des Moines, Iowa, and the arbitration must be commenced in the State of Iowa. Iowa law governs the agreement, subject to state law. This applies to dispute resolution by arbitration or mediation, and the choice of forum.
For a prospective B Bops developer, this means that if a dispute arises that cannot be resolved through mediation, they will likely have to travel to Des Moines, Iowa, to undergo arbitration. This could involve significant travel expenses, legal fees, and time away from their business. The choice of Iowa law could also mean that the franchisee will need to become familiar with Iowa's legal statutes, potentially incurring additional costs for legal consultation.
It is important to note that the FDD also states that for franchises governed by Minnesota law, B Bops will comply with Minnesota Statutes Section 80C.14, subdivisions 3, 4, and 5, which require specific notices of termination and non-renewal of the Franchise Agreement. Additionally, Minnesota Statutes Section 80C.21 and Minnesota Rule Part 2860.4400J state that the provisions in the FDD do not reduce any rights provided under Minnesota Statutes, Chapter 80C. Therefore, franchisees in Minnesota may have additional protections and rights that supersede some of the standard dispute resolution procedures.
Prospective franchisees should carefully review Section 17 and Section 25 of the Development Agreement, as well as consult with a legal professional, to fully understand the implications of the dispute resolution process, choice of forum, and choice of law provisions. Understanding these aspects is crucial for making an informed decision about investing in a B Bops franchise.