In Michigan, can Best Western require arbitration or litigation to be conducted outside of the state?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) A provision requiring that arbitration or litigation be conducted outside this state. This shall not preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, Michigan law protects franchisees from being forced into arbitration or litigation outside of the state. Specifically, the FDD states that franchise agreements cannot include a provision requiring arbitration or litigation to be conducted outside of Michigan. However, the document clarifies that a franchisee can agree to conduct arbitration outside of Michigan at the time the arbitration takes place.
This protection ensures that Best Western franchisees in Michigan are not burdened with the added expense and inconvenience of having to travel out of state to resolve disputes. It allows franchisees to handle legal matters within their own jurisdiction, potentially reducing costs and making the legal process more accessible.
It is important to note that while Best Western cannot mandate out-of-state arbitration or litigation in the initial franchise agreement, a franchisee can later agree to it. This provides flexibility if both parties find it mutually beneficial to resolve a dispute in another location. Prospective franchisees should carefully consider this aspect and seek legal counsel to fully understand their rights and obligations under Michigan franchise law.