factual

Can Bee Organized demand arbitration?

Bee_Organized Franchise · 2025 FDD

Answer from 2025 FDD Document

Amendments to the Bee Organized Franchise Agreement:

In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, the parties to the attached Bee Organized Enterprises, LLC Franchise Agreement (the "Franchise Agreement"), as follows:

    1. The franchise agreement provides that disputes are resolved through arbitration. A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable.
    1. The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
    1. Article 18.G. of the Franchise Agreement, under the heading "Choice of Law, Non-Binding Mediation, Binding Arbitration, and Consent to Jurisdiction," shall be amended by the addition of the following statement added to Article 18.G. of the Franchise Agreement:
    • A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
    1. Article 18.I. of the Franchise Agreement, under the heading "Limitations of Claims," shall be amended by the addition of the following statement added to Article 18.I. of the Franchise Agreement:

Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.

A general release required as a condition of renewal, sale and/or assignment or transfer of a Franchise Agreement shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law

Source: Item 23 — RECEIPTS (FDD pages 54–218)

What This Means (2025 FDD)

According to the 2025 Bee Organized Franchise Disclosure Document, the franchise agreement stipulates that disputes are resolved through arbitration. However, this is subject to certain state laws, specifically in Maryland and Illinois.

In Maryland, a regulation exists that considers it unfair or deceptive to require a franchisee to waive their right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. While the enforceability of the arbitration requirement is disputed due to the Federal Arbitration Act, the Bee Organized franchise agreement is amended to allow a franchisee to bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law. Additionally, any claims under this law must be brought within three years after the grant of the franchise.

For franchisees in Illinois, the Bee Organized franchise agreement is modified to comply with the Illinois Franchise Disclosure Act. While the agreement can provide for arbitration in a venue outside Illinois, any provision that designates jurisdiction or venue outside the state is void. Furthermore, any condition that binds a person acquiring a franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void. This means that while arbitration may be required, franchisees do not waive their rights under Illinois law.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.