What claims are exceptions to the mediation and arbitration requirements for Bens Soft Pretzels disputes?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
| u. | Dispute resolution by arbitration or mediation | Section 12 | Except for certain claims, all disputes must be mediated and arbitrated in the city where our headquarters is located when the proceedings are conducted, currently Goshen, Indiana (subject to state law).
NORTH DAKOTA ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT
Item 17, Additional Disclosures. The following statements are added to Item 17:
Pursuant to the North Dakota Franchise Investment Law, any provision requiring franchisees to consent to the jurisdiction of courts outside North Dakota or to consent to the application of laws of a state other than North Dakota is void. Any mediation or arbitration will be held at a site agreeable to all parties. The laws of the State of North Dakota will govern any dispute.
VIRGINIA ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT
Item 17, Additional Disclosure. In recognition of the restrictions contained in Section 13.1- 564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for Franchisor for use in the Commonwealth of Virginia shall be amended as follows:
"Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable."
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–37)
What This Means (2025 FDD)
According to Bens Soft Pretzels's 2025 Franchise Disclosure Document, Item 17 outlines the dispute resolution process, stating that, in general, disputes must be mediated and arbitrated in Goshen, Indiana. However, this is subject to state law, meaning that specific state addenda may provide exceptions to this requirement.
Specifically, the North Dakota Addendum in Item 22 indicates that any provision requiring franchisees to consent to the jurisdiction of courts outside North Dakota or to consent to the application of laws of a state other than North Dakota is void. It also states that any mediation or arbitration will be held at a site agreeable to all parties and that the laws of North Dakota will govern any dispute. This means that for Bens Soft Pretzels franchisees in North Dakota, the standard mediation and arbitration terms in the franchise agreement do not apply, and disputes will be resolved within North Dakota under North Dakota law.
Additionally, the Virginia Addendum in Item 22 states that no statement signed by a franchisee can waive claims under any applicable state franchise law, including fraud in the inducement, or disclaim reliance on any statement made by Bens Soft Pretzels. This suggests that while mediation and arbitration may still be required, franchisees in Virginia retain their rights to pursue certain claims under Virginia law, regardless of any agreement to the contrary in the franchise agreement. Therefore, prospective franchisees should carefully review any state-specific addenda to understand their rights and obligations regarding dispute resolution.