Does state law affect the dispute resolution process for Bang Cookies franchise agreements?
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, state law does have an impact on the dispute resolution process. While the franchise agreement specifies that disputes will initially undergo non-binding mediation and then binding arbitration in Bergen County, New Jersey, this is explicitly stated to be 'subject to applicable state law.'
This means that the laws of the state in which the franchisee operates could potentially override or modify the dispute resolution procedures outlined in the franchise agreement. For example, some states may have laws that prohibit mandatory arbitration clauses or that require mediation to be conducted in a different location. These state laws would take precedence over the terms specified in the Bang Cookies franchise agreement.
Furthermore, the choice of law provision specifies that New Jersey law will govern the agreement. However, this is also 'subject to state law and as otherwise disclosed in Exhibit I to this Disclosure Document.' This indicates that Exhibit I contains additional information about how state laws may affect the interpretation and enforcement of the franchise agreement, including dispute resolution. Therefore, prospective Bang Cookies franchisees should carefully review Exhibit I and consult with legal counsel to understand how state laws in their area may impact the dispute resolution process.