Where will arbitration be conducted for a Belocal franchise dispute?

According to Belocal's 2025 Franchise Disclosure Document, arbitration will be conducted in the city where Belocal maintains its principal business office at the time of the arbitration. This means that if a dispute arises and cannot be resolved directly, the franchisee may be required to travel to Belocal's headquarters for arbitration proceedings.

This requirement could pose a significant financial burden on the franchisee, as they will be responsible for their own travel expenses, including transportation, accommodation, and meals, as well as attorney's fees and other arbitration-related costs. While the arbitrator can award the prevailing party their reasonable costs and fees, including attorney's fees, the franchisee will still need to cover these expenses initially.

It is important to note that the arbitration must be administered in accordance with the Commercial Rules of the American Arbitration Association (AAA), and the arbitrator must be experienced in franchising or franchise law with no prior business or professional relationship with either party. The arbitration will be governed by the Federal Arbitration Act, and the parties agree that any state laws attempting to prohibit arbitration or void out-of-state forums for arbitration are preempted by the FAA.

Prospective Belocal franchisees should carefully consider the implications of the arbitration clause, including the location of the arbitration and the potential costs involved. They may want to consult with an attorney to fully understand their rights and obligations under the franchise agreement.