Where will arbitration occur for disputes related to the Bang Cookies Franchise Agreement, and who bears the costs?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Any dispute between the parties relating to this Agreement shall be brought in accordance with the dispute resolution procedures set forth in the Franchise Agreement. Notwithstanding the foregoing, if any of the dispute resolution procedures set forth in the Franchise Agreement conflict with any of the terms of this Agreement, the terms of this Agreement shall prevail. Without limitation to the foregoing, you agree that:
(a) Arbitration – Except, at our option, as to any claims or disputes related to or concerning a breach of this Agreement by you that may entitle us to the award of injunctive relief, you agree that any and all disputes, controversies, and claims, arising from and/or related to this Agreement, shall be submitted to the American Arbitration Association ("AAA") for binding arbitration. Arbitration shall be conducted by one arbitrator in accordance with the AAA's then current rules for commercial disputes, except as may be otherwise required in this Agreement. All arbitration proceedings shall be conducted in Bergen County, New Jersey or, if suitable AAA facilities are not available in Bergen County, New Jersey then at a suitable AAA location selected by the arbitrator that is located closest to Bergen County, New Jersey.
In connection with binding arbitration, you agree that:
- (i) All matters relating to arbitration, will be governed by the United States Federal Arbitration Act, except as expressly or otherwise set forth in this Agreement;
- (ii) The arbitration hearing shall be conducted within 180 days of the demand for arbitration;
- (iii) The arbitrator shall render written findings of fact and conclusions of law;
- (iv) Except as may be otherwise required and/or prohibited by this Agreement, the arbitrator has the right to award or include in his or her award any relief that he or she determines to be proper, including monetary damages, interest on unpaid sums, specific performance, injunctive relief, attorneys' fees, and costs and expenses as allowable under this Agreement. Notwithstanding the foregoing, under no circumstance shall the Arbitrator be authorized to award or declare the Licensed Marks to be generic or invalid; and
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, disputes will be settled through arbitration administered by the American Arbitration Association (AAA). The location for these proceedings is primarily Bergen County, New Jersey. If suitable AAA facilities are unavailable there, the arbitration will occur at an alternative AAA location closest to Bergen County, New Jersey.
However, there are exceptions for franchisees in certain states. For franchisees who purchased their Bang Cookies franchise in Washington, the arbitration site will be in the State of Washington, or a location mutually agreed upon by both parties, or as determined by the arbitrator. For franchisees in Illinois, any provision in the Franchise Agreement that designates jurisdiction or venue outside the State of Illinois is void; however, a Franchise Agreement may provide for arbitration in a venue outside Illinois.
Regarding costs, the Franchise Agreement states that if an arbitrator or court finds the franchisee in breach of the agreement, Bang Cookies is entitled to recover all reasonable attorney fees, costs, and expenses associated with the arbitration or litigation. These expenses include attorney fees, arbitration fees, arbitrator fees, deposition expenses, expert witness fees, and filing fees. This means that franchisees could be responsible for covering Bang Cookies's legal costs if they lose the arbitration case.