Can Beard Papas require litigation to be conducted outside of the franchisee's state?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
NORTH DAKOTA FRANCHISE AGREEMENT AMENDMENT
Amendments to the Beard Papa's Franchise Agreement
In recognition of the North Dakota Franchise Investment Law, Section 51-19, the parties to the attached Muginoho International, Inc. Franchise Agreement (the "Franchise Agreement") agree as follows:
The North Dakota Addendum is only applicable if you are a resident of North Dakota or if your Beard Papa's Shop outlet will be located within the State of North Dakota.
Article 18 of the Franchise Agreement is hereby amended by the addition of the following language: "Covenants requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota may not be enforceable in North Dakota."
Rhode Island FDD Amendment
Amendments to the Beard Papa's Franchise Disclosure Document
- Item 17, "Renewal, Termination, Transfer and Dispute Resolution," Item 17 is supplemented by the addition of the following:
- A. The Rhode Island Franchise Investment Act, R.I. Gen. Law Ch. 395 Sec. 19-28.1-14 provides that a provision in a Franchise Agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under the Rhode Island Franchise Investment Act.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas FDD, the brand cannot enforce provisions that require franchisees to litigate outside of their home state in certain instances. For example, the North Dakota Franchise Agreement Amendment states that "Covenants requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota may not be enforceable in North Dakota." Similarly, the Rhode Island FDD Amendment indicates that any provision restricting jurisdiction or venue to a forum outside of Rhode Island is void with respect to a claim otherwise enforceable under the Rhode Island Franchise Investment Act.
These stipulations mean that if a Beard Papas franchisee in North Dakota or Rhode Island brings a claim under their respective state's franchise laws, they may have the right to litigate those claims in their home state, regardless of what the franchise agreement says. This protects franchisees from having to bear the additional costs and burdens of traveling to another state to resolve legal disputes with Beard Papas.
It's important to note that these protections are specific to certain states and may only apply to claims arising under those states' franchise laws. Franchisees in other states may still be subject to forum selection clauses in the franchise agreement that require them to litigate disputes in a specific jurisdiction, potentially outside of their home state. Prospective franchisees should carefully review the franchise agreement and any state-specific amendments to understand their rights and obligations regarding dispute resolution.