Where must litigation against Belocal be brought if arbitration is not required or permitted?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
To the extent that litigation is permitted in accordance with the above provisions, or in the event that, notwithstanding the above provisions, it is ultimately determined that a particular claim is not arbitrable under applicable law, the following provisions shall apply:
- (1) VENUE AND JURISDICTION.
ANY ACTION BROUGHT BY ANY PARTY AGAINST THE OTHER IN ANY COURT, WHETHER FEDERAL OR STATE, MUST BE BROUGHT EXCLUSIVELY WITHIN THE COUNTY OR THE FEDERAL JUDICIAL DISTRICT WHERE FRANCHISOR'S PRINCIPAL BUSINESS OFFICE IS LOCATED.
FRANCHISEE AND ITS PRINCIPALS HEREBY SUBMIT TO THE JURISDICTION OF THOSE COURTS FOR PURPOSES OF ANY SUCH PROCEEDING AND WAIVE ANY OBJECTIONS TO JURISDICTION AND ANY CLAIM THAT SUCH PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM OR THAT VENUE IS IMPROPER.
NOTWITHSTANDING THE ABOVE, WITH RESPECT TO ANY ACTION WHICH INCLUDES INJUNCTIVE RELIEF OR
OTHER PROVISIONAL RELIEF, ANY PARTY 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, if litigation is permitted because arbitration is not required or allowed under applicable law, any legal action must be brought exclusively in the county or federal judicial district where Belocal's principal business office is located. The franchisee and their principals consent to the jurisdiction of those courts and waive any objections to jurisdiction or claims that the proceeding is in an inconvenient forum or that the venue is improper.
However, there is an exception: any action that includes injunctive relief or other provisional relief can be brought in any court in any state that has jurisdiction. This means that while most litigation must occur where Belocal's main office is, a franchisee could seek immediate court intervention, such as a temporary restraining order, in their own state if necessary.
This requirement could increase costs for a Belocal franchisee who does not reside near Belocal's principal business office, as they would need to travel for court proceedings and potentially hire local counsel. It is a fairly common practice in franchising to have disputes resolved in the franchisor's home jurisdiction, but franchisees should consider the potential financial and logistical burdens this may impose.