Does the Beard Papas franchise agreement mandate arbitration for dispute resolution?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
18.N. ATTORNEY FEES AND EXPENSES
Franchisee agrees that in the event that an arbitrator in any arbitration proceeding and/or, a court of competent jurisdiction shall issue an award, judgment, decision and/or order finding, holding and/or declaring Franchisee's breach of this Agreement than Franchisor shall also be entitled to the recovery of all reasonable attorney fees, costs and expenses associated with and/or related to such arbitration and/or litigation. Said fees, costs and expenses shall include, but not be limited to, attorney fees, arbitration fees, arbitrator fees, deposition expenses, expert witness fees and filing fees.
18.O. NO CLASS ACTION OR MULTI-PARTY ACTIONS
FRANCHISOR AND FRANCHISEE AGREE THAT ALL PROCEEDINGS AND/OR LEGAL ACTIONS ARISING OUT OF OR RELATED TO THIS AGREEMENT AND/OR THE OFFER AND SALE OF THE BEARD PAPA'S FRANCHISE FROM FRANCHISOR TO FRANCHISEE, WILL BE CONDUCTED ON AN INDIVIDUAL BASIS AND NOT A CLASS-WIDE BASIS, AND, THAT ANY PROCEEDING BETWEEN FRANCHISEE, FRANCHISEE'S OWNERS, SPOUSES AND/OR GUARANTORS AND FRANCHISOR AND/OR FRANCHISOR'S AFFILIATES, OFFICERS, DIRECTORS AND/OR EMPLOYEES MAY NOT BE CONSOLIDATED WITH ANY OTHER PROCEEDING BETWEEN FRANCHISOR AND ANY OTHER THIRD PARTY.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
The 2025 Beard Papas Franchise Disclosure Document (FDD) indicates that the franchise agreement includes provisions for dispute resolution. Specifically, the agreement stipulates that any legal actions or proceedings related to the franchise agreement or the sale of the Beard Papas franchise will be conducted on an individual basis, explicitly prohibiting class-action lawsuits or the consolidation of proceedings with other third parties.
The FDD also mentions that if an arbitrator or a court finds the franchisee in breach of the agreement, Beard Papas is entitled to recover reasonable attorney fees, costs, and expenses associated with the arbitration or litigation. These recoverable costs include attorney fees, arbitration fees, arbitrator fees, deposition expenses, expert witness fees, and filing fees.
Furthermore, amendments to the FDD for franchisees in Washington state specify that in any arbitration or mediation involving a franchise purchased in Washington, the site for such proceedings will be in Washington or a location mutually agreed upon. The Washington Franchise Investment Protection Act may also supersede the franchise agreement in areas of termination and renewal. Similarly, the North Dakota Franchise Investment Law states that any provision requiring a franchisee to waive their right to a jury trial is considered unfair. These state-specific amendments suggest that while arbitration may be a component of the Beard Papas franchise agreement, its application and enforceability can vary based on state laws and regulations.