Under the B Bops Development Agreement, where must arbitration take place for dispute resolution?
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. |
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 under the Development Agreement, with certain exceptions, must be arbitrated in Des Moines, Iowa. Specifically, this applies to all disputes except for claims related to the use of licensed marks or proprietary information. Furthermore, the FDD states that arbitration must be commenced in the State of Iowa. This means that any legal proceedings, excluding those involving trademarks or confidential data, will be conducted through arbitration within Iowa, specifically in Des Moines.
For a prospective B Bops developer, this requirement means that if a dispute arises with the franchisor that cannot be resolved informally, the franchisee will likely need to travel to Des Moines, Iowa, to participate in arbitration proceedings. This could involve significant travel expenses, legal fees, and time away from their business. It is important to note the exception for claims related to the use of licensed marks or proprietary information, which may be subject to different dispute resolution processes or venues.
The choice of forum and governing law can have a substantial impact on the outcome of a dispute. Iowa law will govern the interpretation and enforcement of the Development Agreement, potentially requiring the franchisee to become familiar with Iowa's legal system. While the FDD mentions Minnesota Statutes related to franchise rights, it clarifies that those statutes do not reduce any rights provided under Minnesota law, suggesting that franchisees in Minnesota may have additional protections.
It is common for franchise agreements to specify a particular location for arbitration to provide predictability and consistency in dispute resolution. However, franchisees should carefully consider the implications of this clause, including the potential costs and inconvenience of traveling to the designated location. Prospective B Bops franchisees should consult with an attorney to fully understand their rights and obligations under the Development Agreement, particularly concerning dispute resolution and choice of law.