Are there any exceptions to the mandatory arbitration clause in the Benjamin Franklin Plumbing agreement?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
- 23.4. Disputes Not Subject to Mandatory Arbitration.
Notwithstanding Section 23.2, Franchisor shall have the option to submit to a court any of the following actions: to collect fees due under this Agreement; for injunctive or other relief as described in Section 23.3; to protect our intellectual property, including the Marks, Confidential Information, and trade secrets; to terminate this Agreement for a default; and to enforce the postterm obligations in Section 17 of this Agreement.
Notwithstanding anything in this Agreement, in the JAMS Rules, or any provision of law, the determination of whether a dispute or controversy filed in a court is subject to arbitration shall be made by the court, not by an arbitrator.
- 23.5. Time Limit on Filing.
Except for claims arising from Franchisee's non-payment or underpayment of amounts Franchisee owes Franchisor or from performance or non-performance of Franchisee's obligations arising upon expiration or termination of this Agreement, any claim or action arising out of or relating to this Agreement or the relationship between us and Franchisee and the Owners will be barred unless submitted to arbitration or filed in court and served within two (2) years from the date the complaining party knew or should have known of the facts giving rise to such claim.
- 23.6. Venue for Litigation.
Franchisee and the Owners are required to file any lawsuit against us only in the federal district court for the district encompassing Columbia, Maryland (or in the closest state court to Columbia, Maryland, if the federal court lacks subject matter jurisdiction).
We may file a lawsuit against Franchisee or the Owners in the federal or state court for Columbia, Maryland or in the federal or state court where the Franchised Business is located.
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, while arbitration is generally mandatory for disputes, there are specific exceptions where Benjamin Franklin Plumbing can opt to pursue action in court. These exceptions include actions to collect fees owed by the franchisee, to seek injunctive or other relief, to protect intellectual property such as trademarks and trade secrets, to terminate the agreement due to a default by the franchisee, and to enforce post-term obligations outlined in Section 17 of the agreement. This means that Benjamin Franklin Plumbing retains the right to use the court system for certain critical issues, rather than being limited to arbitration.
Furthermore, the FDD specifies that the determination of whether a dispute is subject to arbitration will be made by the court, not by an arbitrator, regardless of what is stated in the agreement or the JAMS (Judicial Arbitration and Mediation Services) Rules. This clarification ensures that the court system has the final say on whether a particular dispute falls under the arbitration clause. This is an important protection for franchisees, as it prevents the arbitrator from unilaterally deciding the scope of their own authority.
Additionally, any claim or action arising out of the franchise agreement must be submitted to arbitration or filed in court within two years from when the complaining party knew or should have known about the facts giving rise to the claim. This time limit does not apply to claims arising from the franchisee's non-payment or underpayment of amounts owed to Benjamin Franklin Plumbing, or from performance or non-performance of the franchisee's obligations upon expiration or termination of the agreement. This means franchisees need to be aware of this deadline to ensure they do not lose their right to pursue a claim. Benjamin Franklin Plumbing also requires that any lawsuit filed against them by the franchisee be filed in the federal district court for the district encompassing Columbia, Maryland, or the closest state court if the federal court lacks jurisdiction. Benjamin Franklin Plumbing, however, can file a lawsuit against the franchisee in the federal or state court for Columbia, Maryland, or where the franchised business is located.