Where must litigation initiated by an owner of a Bananas Smoothies Frozen Yogurt franchise be brought?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise stated herein, any and all controversies, claims or disputes among Franchisor, Franchisee and any or all of their respective owners, affiliates, officers, directors, shareholders, members, employees and agents shall be resolved by litigation and brought, maintained and concluded exclusively in either the State Courts of New Jersey as hereinafter specified or Federal Court, in the United States District Court, the Newark vicinage in the State of New Jersey. If Franchisor initiates litigation in the State Court of New Jersey, such litigation may, in Franchisor's sole discretion, be instituted in either Morris County, Essex County or Union County New Jersey. If litigation is instituted by Franchisee, its owners or any party hereto, other than Franchisor, in State Court, such litigation shall be instituted maintained and concluded only in Morris County, New Jersey and if in Federal Court, the United States District Court in the Newark vicinage in the State of New Jersey. Franchisee and each owner, waive to the fullest extent permitted by law, any objection that Franchisee and each owner may now or in the future have to the laying of jurisdiction or venue of any litigation arising out of or in connection with this Agreement brought by Franchisor in Federal Court in the United States District State Court, Newark vicinage or in State Court by Franchisor, in either Morris County, Essex County, or Union County in New Jersey or if brought by Franchisee and/or any owner thereof in the State Court, in Morris County, New Jersey. Franchisee and any owner thereof or any party hereto,
waives any objection as to any action or proceeding brought in such court or that such court is an inconvenient forum. The Franchisee or any owner or any party hereto, further acknowledges and agrees that Franchisor may institute legal action for injunctive relief including temporary restraining orders and preliminary injunctions pursuant to Paragraph 29.03 "Right to Injunctive Relief".
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, any litigation initiated by a franchisee or their owners, as opposed to the franchisor, must be brought in specific courts within New Jersey. Specifically, if a franchisee initiates litigation in State Court, it must be instituted, maintained, and concluded only in Morris County, New Jersey. If the litigation is pursued in Federal Court, it must be in the United States District Court in the Newark vicinage in the State of New Jersey.
This requirement means that a Bananas Smoothies Frozen Yogurt franchisee may face additional costs and logistical challenges if they need to sue the franchisor, as they will be required to litigate in New Jersey regardless of where their franchise is located. This could involve significant travel expenses, the need to hire local counsel in New Jersey, and the inconvenience of being distant from their business operations during legal proceedings.
The FDD also states that the franchisee and their owners waive any objections to the jurisdiction or venue of these courts, agreeing that these courts are not an inconvenient forum. This waiver reinforces the franchisor's control over the legal proceedings' location. Furthermore, the franchisor retains the discretion to initiate litigation against the franchisee in either Morris County, Essex County, or Union County in New Jersey if pursued in State Court, providing the franchisor with some choice of venue when they are the plaintiff.
It is important for prospective Bananas Smoothies Frozen Yogurt franchisees to carefully consider this clause, as it can significantly impact their ability to effectively pursue legal claims against the franchisor. Franchisees should seek legal counsel to fully understand the implications of this venue restriction and to assess the potential costs and challenges associated with litigating in New Jersey.