Where must all court proceedings arising out of or relating to the Bath Tune Up agreement be brought?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) All court proceedings arising out of or relating to this Agreement (including matters described in Section 11.2 above) will be brought in, and only in, the United States District Court for the District of South Dakota. No individual or entity (whether named or otherwise designated) will be joined as a party to those proceedings if that joinder has the effect of destroying federal court jurisdiction, unless that individual or entity is a necessary party to the proceeding as a matter of law. Where there is no United States District Court having jurisdiction over the dispute, the proceeding may be initiated in, and only in, a state court of competent jurisdiction in and for Brown County, South Dakota. In either case, Franchisor and Franchisee consent to the exclusive exercise of jurisdiction by those courts.
- (b) The parties agree that all disputes submitted to the court under Section 11.2 will be tried to the court sitting without a jury, in spite of any state or federal constitutional or statutory rights or provisions.
- (c) No punitive or exemplary damages will be awarded against either Franchisor or Franchisee, or any affiliates of either of them, in any proceeding arising under Section 11.2, and all claims to punitive or exemplary damages are waived by both parties.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, any court proceedings arising from the franchise agreement must be initiated in the United States District Court for the District of South Dakota. There is an exception if the federal court lacks jurisdiction over the dispute. In that case, the proceedings can be initiated in a state court of competent jurisdiction in and for Brown County, South Dakota. Bath Tune Up and the franchisee both consent to the exclusive jurisdiction of these courts.
This clause dictates the legal venue for resolving disputes, which can significantly impact costs and convenience for the franchisee. Litigating in South Dakota could be more expensive for franchisees located elsewhere due to travel, lodging, and potentially hiring local counsel.
Furthermore, the agreement stipulates that disputes submitted to the court will be tried by the court without a jury, despite any state or federal constitutional or statutory rights. The agreement also waives punitive or exemplary damages against either Bath Tune Up or the franchisee, or any of their affiliates, in any proceeding arising under Section 11.2.