Where must all mediation, arbitration, and litigation proceedings be conducted related to a Bang Cookies franchise?
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, all mediation, arbitration, and litigation proceedings must occur in a specific location. Specifically, these proceedings must be conducted in, or closest to, the State court of general jurisdiction that is within or closest to Bergen County, New Jersey. This requirement is subject to applicable state law, meaning that the laws of the state where the proceedings take place may influence how the proceedings are conducted.
This clause is important for prospective Bang Cookies franchisees because it dictates where they may have to travel and incur legal expenses if a dispute arises with the franchisor. Bergen County, New Jersey, will be the default location for resolving disputes, regardless of where the franchisee's Bang Cookies location is situated. This could create a significant cost burden for franchisees located far from New Jersey.
It is typical in franchising for the franchisor to specify a particular jurisdiction for dispute resolution, often their home state. This allows the franchisor to operate within a familiar legal environment. However, franchisees should carefully consider the potential travel and legal costs associated with this requirement when evaluating the Bang Cookies franchise opportunity. Franchisees should consult with a legal professional to understand the full implications of this clause and how it might affect them based on their location and circumstances.