For Bang Cookies disputes, where must mediation and arbitration take place, and what claims are exceptions to this?
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. |
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, dispute resolution requires that all disputes, with a specific exception, must first go through non-binding mediation in Bergen County, New Jersey. If the mediation is not successful, the dispute will then proceed to binding arbitration, also in Bergen County, New Jersey. The FDD specifies that these provisions are subject to applicable state law.
Furthermore, all mediation, arbitration, and litigation proceedings, if applicable, must be conducted in the state court of general jurisdiction within or closest to Bergen County, New Jersey. This stipulation ensures that any legal proceedings will occur in a specific location, which could impact travel costs and legal representation for franchisees located outside of New Jersey. This provision is also subject to applicable state law.
The exception to the mediation and arbitration requirement involves claims for injunctive relief. Injunctive relief typically involves seeking a court order to prevent someone from taking a particular action. The FDD does not elaborate on why these claims are exempt, but it is common in franchise agreements to allow franchisors to seek immediate injunctive relief to protect their brand standards, trade secrets, and intellectual property without first going through mediation or arbitration. This is a notable exception for prospective franchisees to consider.