What dispute resolution process is required for Bang Cookies disputes, and where must it occur?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
| q. | Non-competition covenants during the term of the franchise | Not applicable | Not applicable as to Multi-Unit Development Agreement. However, each Shop developed pursuant to Multi-Unit Development Agreement will be subject to non-competition covenants set forth in each respective Franchise Agreement. |
|---|---|---|---|
| r. | Non-competition covenants after the franchise is terminated or expires | Not applicable | Not applicable as to Multi-Unit Development Agreement. However, each Shop developed pursuant to Multi-Unit Development Agreement will be subject to non-competition covenants set forth in each respective Franchise Agreement. |
| s. | Modification of the agreement | 5.3, 7.11 | Only by written agreement between you and us or if governing law requires a modification. We can change the form of the Franchise Agreement for future Shops which will not alter your obligations under the Multi-Unit Development Agreement. |
| t. | Integration/merger clauses | 7.12 | The Multi-Unit Development Agreement is the entire agreement between you and us relating to the development of the Exclusive Territory. Notwithstanding the foregoing, nothing in any agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. |
| u. | Dispute resolution by arbitration or mediation | 7.5, 7.6 | Except for certain claims for injunctive relief, all disputes must first be submitted to non-binding mediation in Bergen County, New Jersey and, if mediation is unsuccessful, then to binding arbitration in Bergen County, New Jersey. This provision is subject to applicable state law. |
| v. | Choice of forum | 7.5, 7.6 | All mediation, arbitration and, if applicable, litigation proceedings must be conducted in, or closest to, State court of general jurisdiction that is within or closest to Bergen County, New Jersey. This provision is subject to applicable state law. |
| w. | Choice of law | 7.5, 7.6 | New Jersey law will govern. However, this provision is subject to state law and as otherwise disclosed in Exhibit I to this Disclosure Document. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–49)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the resolution of disputes involves a two-step process and a specific location. Except for claims seeking injunctive relief, all disputes must initially undergo non-binding mediation. If the mediation is not successful in resolving the dispute, the parties must then proceed to binding arbitration. Both the mediation and arbitration proceedings are required to take place in Bergen County, New Jersey. Furthermore, any litigation, if applicable, must be conducted in the state court of general jurisdiction within or closest to Bergen County, New Jersey. This entire dispute resolution process is subject to applicable state law, which could potentially modify or supersede these requirements.
For a prospective Bang Cookies franchisee, this means that if a dispute arises with the franchisor, they will be required to participate in mediation and potentially arbitration in Bergen County, New Jersey, regardless of where their franchise is located. This could involve significant travel expenses and legal costs, especially for franchisees located far from New Jersey. The franchisee should also be aware that the laws of New Jersey will govern the interpretation and enforcement of the franchise agreement, which may be different from the laws of their home state.
The requirement to mediate and arbitrate in New Jersey could create a disadvantage for franchisees due to the potential costs and logistical challenges associated with traveling to and engaging legal representation in New Jersey. While the FDD mentions that these provisions are subject to applicable state law, it is crucial for potential franchisees to understand how their state's laws might interact with these requirements. It is common in franchise agreements to specify a particular venue and governing law for dispute resolution, but the specific location can significantly impact a franchisee's ability to effectively pursue their legal rights.
Prospective franchisees should seek legal counsel to fully understand the implications of these dispute resolution provisions. They should inquire about the potential costs associated with mediation, arbitration, and litigation in New Jersey, as well as the extent to which their state's laws might offer any protection or alternatives. Understanding these factors is essential for making an informed decision about investing in a Bang Cookies franchise.