Does the arbitration provision for Baya Bar remain in effect after the franchise agreement expires or terminates?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
ore uses thereof, and may be exercised at any time or from time to time as often as may be expedient; and any option or election to enforce any such right or remedy may be exercised or taken at any time and from time to time. The expiration, earlier termination or exercise of Franchisor's rights pursuant to Article 17 shall not discharge or release Franchisee or any Principal from any liability or obligation then accrued, or any liability or obligation continuing beyond, or arising out of, the expiration, the earlier termination or the exercise of such rights under this Agreement.
- 21.10. Consent to Do Business Electronically. The parties to the Franchise Agreement hereby consent to do business electronically.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
Based on the 2024 Baya Bar Franchise Disclosure Document, the franchise agreement contains provisions that extend beyond the termination or expiration of the agreement. Specifically, any obligation that requires performance after the agreement ends will remain in effect. This includes various aspects of the agreement, such as post-termination obligations and non-compete clauses.
According to the FDD, upon termination or expiration of the agreement, franchisees must cease operating the Baya Bar business and discontinue using Baya Bar's trademarks and intellectual property. They must also ensure that they do not represent themselves as current Baya Bar owners or franchisees. Additionally, franchisees are responsible for promptly paying any outstanding amounts owed to the franchisor and its affiliates, which may include damages, costs, and attorney's fees resulting from any default by the franchisee.
Furthermore, the franchise agreement includes non-compete restrictions that apply both during the term of the agreement and for a specified period after termination or expiration. These restrictions prevent franchisees from engaging in activities that could harm the Baya Bar system, such as diverting customers or participating in similar businesses within a certain distance of a Baya Bar location. Given that these obligations extend beyond the life of the franchise agreement, it is highly likely that the arbitration clause, as a mechanism for resolving disputes related to these ongoing obligations, would also survive termination or expiration.