What dispute resolution procedures are required for disputes related to the Beard Papas franchise?

According to the 2025 Beard Papas Franchise Disclosure Document, dispute resolution involves specific procedures. Except for claims seeking injunctive relief, all disputes must initially undergo non-binding mediation in Los Angeles County, California. If mediation fails to resolve the dispute, it must then be submitted to binding arbitration, also in Los Angeles County, California. This process is subject to applicable state law, which means that the specific requirements and enforceability of these provisions can vary depending on the franchisee's location.

The requirement for mediation before arbitration is a fairly common practice in franchising, as it offers an opportunity for both parties to resolve issues amicably and potentially avoid the costs and time associated with arbitration. However, the stipulation that both mediation and arbitration must occur in Los Angeles County, California, could present a significant burden for franchisees located outside of California. They would need to factor in travel expenses and potential legal representation costs in California when considering the franchise.

The FDD also specifies that all mediation, arbitration, and litigation proceedings must be conducted in the state court of general jurisdiction within or closest to Los Angeles County, California, or, if appropriate, the United States District Court nearest to Beard Papas's corporate headquarters at the time the action is filed. Furthermore, California law governs the agreement, although this is subject to state law and any disclosures in Exhibit I of the Disclosure Document. Prospective franchisees should carefully review Exhibit I and consult with a legal professional to understand the full implications of these dispute resolution procedures and choice of law provisions, especially if they are located outside of California.