Where must disputes with Beard Papas be submitted for binding arbitration?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
| r. | Non-competition covenants after the franchise is terminated or expires | 6, 17.E. | No involvement, ownership, or interest whatsoever for 24 months in any competing business in: your Designated Territory; a 25-mile radius of your Designated Territory; a 10-mile radius of the Designated Territory of any other Shop; and you must comply with confidentiality, non disclosure and non-solicitation covenants. |
|---|---|---|---|
| s. | Modification of the agreement | 18.L. | Requires writing signed by you and us, except for unilateral |
| changes that we may make to the Manuals or our unilateral | |||
| reduction of the scope of a restrictive covenant that we may | |||
| make in our discretion. | |||
| t. | Integration/merger clauses | 18.M. | Only the terms of the Franchise Agreement and schedules to |
| the Franchise Agreement and the respective signed exhibits | |||
| to the Franchise Agreement are binding, subject to state | |||
| law. 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 | 18.G. | Except for certain claims for injunctive relief, all disputes must first be submitted to non-binding mediation in Los Angeles County, California and, if mediation is unsuccessful, then to binding arbitration in Los Angeles County, California. This provision is subject to applicable state law. |
| v. | Choice of forum | 18.G. | 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 Los | |||
| Angeles County, California | |||
| or, if appropriate, the United | |||
| States District Court nearest to our corporate headquarters | |||
| at the time such action is filed. This provision is subject to | |||
| applicable state law. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–51)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, disputes with Beard Papas must first be submitted to non-binding mediation in Los Angeles County, California. If mediation is unsuccessful, the dispute will then proceed to binding arbitration, also in Los Angeles County, California. This requirement is subject to applicable state law, meaning that certain state laws may override or modify this provision.
This means that if a Beard Papas franchisee has a dispute with the company, they will likely need to travel to Los Angeles County, California, to attempt to resolve the issue through mediation and, if necessary, arbitration. This could involve significant travel expenses and legal fees, especially for franchisees located outside of California. Franchisees should factor these potential costs into their investment decision.
It is common for franchise agreements to include clauses requiring arbitration in a specific location, often the franchisor's home state. This can create a home-court advantage for the franchisor, as they are more familiar with the local legal environment. Prospective Beard Papas franchisees should carefully consider this provision and consult with an attorney to understand their rights and obligations under the franchise agreement.