Does the Bang Cookies franchise agreement require litigation to be conducted outside of the franchisee's state?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
re Law or the Indiana Deceptive Franchise Practices Act.
Maryland FDD Amendment
Amendments to the Bang Cookies Franchise Disclosure Document
Item 17, "Renewal, Termination, Transfer and Dispute Resolution," is supplemented, by the addition of the following:
- A. The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
- B. A Franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
- C. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
- D. The Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et seq.).
Michigan FDD Amendment
Amendments to the Bang Cookies Franchise Disclosure Document
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- THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
- A. A prohibition of your right to join an association of Franchisees.
- B. A requirement that you assent to a release, assignment, novation, waiver or estoppel that deprives you of rights and protections provided in this act. This shall not preclude you, after entering into a Franchise Agreement, from settling any and all claims.
- C.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the franchise agreement may contain provisions requiring litigation to be conducted outside of the franchisee's state, but these provisions may not be enforceable in certain states. Specifically, the Michigan FDD Amendment states that any provision requiring litigation to be conducted outside of Michigan is void and cannot be enforced against the franchisee. However, the Michigan franchisee can agree to conduct litigation outside of the state at the time of the litigation.
Additionally, the Rhode Island Franchise Investment Act stipulates that any provision in a Bang Cookies Franchise Agreement restricting jurisdiction or venue to a forum outside of Rhode Island, or requiring the application of the laws of another state, is void with respect to a claim otherwise enforceable under the Rhode Island Franchise Investment Act. The Illinois Franchise Disclosure Act also states that any provision in a Franchise Agreement that designates jurisdiction or venue outside the State of Illinois is void.
For prospective Bang Cookies franchisees, this means that while the franchise agreement might initially include clauses mandating out-of-state litigation, these clauses may not hold up in Michigan, Rhode Island, or Illinois due to state-specific franchise laws. Franchisees should be aware of the legal protections afforded to them by their state's franchise laws, as these can override certain terms in the standard franchise agreement. It is advisable to consult with an attorney to understand the specific implications of these provisions and amendments in their state.