For legal proceedings related to the Belocal agreement, in which county or judicial district will the venue be, assuming the Franchisor seeks no injunctive relief?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
COVENANTOR FURTHER AGREES THAT VENUE FOR ANY PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT WILL BE THE COUNTY OR JUDICIAL DISTRICT IN WHICH THE FRANCHISOR'S PRINCIPAL PLACE OF BUSINESS IS LOCATED; PROVIDED, HOWEVER, WITH RESPECT TO ANY ACTION WHICH INCLUDES INJUNCTIVE RELIEF OR OTHER EXTRAORDINARY RELIEF, FRANCHISOR MAY BRING SUCH ACTION IN ANY COURT IN ANY STATE WHICH HAS JURISDICTION.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the venue for any legal proceeding relating to or arising out of the franchise agreement will be the county or judicial district in which Belocal's principal place of business is located. However, if the action includes injunctive relief or other extraordinary relief, Belocal may bring such action in any court in any state which has jurisdiction. This means that if Belocal is not seeking injunctive relief, the franchisee may have to travel to the location of Belocal's principal business office for any legal proceedings.
This clause is important for prospective franchisees to consider, as it could significantly impact the cost and convenience of resolving disputes with Belocal. Franchisees should be aware that they may be required to litigate in a location that is not convenient for them. It is also important to note that the agreement specifies that Texas law governs the agreement, without reference to Texas conflict of law principles.
Many franchise agreements contain similar venue clauses, requiring disputes to be resolved in the franchisor's home jurisdiction. This is generally seen as a way for franchisors to reduce costs and ensure consistency in legal proceedings. However, franchisees should carefully consider the implications of such clauses before signing a franchise agreement. Franchisees might want to consult with an attorney to understand their rights and options in the event of a dispute with Belocal.
In summary, the venue for legal proceedings related to the Belocal agreement, assuming Belocal seeks no injunctive relief, will be the county or judicial district in which Belocal's principal place of business is located. This could have significant implications for franchisees in terms of cost and convenience, and they should carefully consider this clause before signing the franchise agreement.