Where will arbitration be conducted for Bft Franchise Agreements and Multi-Unit Agreements?

According to Bft's 2025 Franchise Disclosure Document, the location for arbitration will be at Bft's principal place of business, which is currently in Irvine, California. Alternatively, Bft can designate another location. The costs associated with arbitration will be determined as specified in the Franchise Agreement and Multi-Unit Agreement.

This means that if a dispute arises between a franchisee or multi-unit developer and Bft that cannot be resolved through other means, the arbitration proceedings, which are binding, will likely take place in California, or a location chosen by Bft. This could present a logistical and financial challenge for franchisees located outside of California, as they would need to travel and potentially hire local counsel.

It is important for prospective franchisees and developers to carefully consider the implications of this clause, especially if they are located far from California. They should also consult with legal counsel to understand the potential costs and burdens associated with arbitrating disputes in a distant location. Additionally, franchisees should be aware of any state-specific laws that may affect the enforceability of venue restrictions in franchise agreements, as noted in the FDD for states like California.

Prospective franchisees should also be aware that the FDD mentions that the Franchise Agreement and Multi-Unit Agreement provides for termination upon bankruptcy, but this provision may not be enforceable under federal bankruptcy law. The FDD also states that the Franchise Agreement and Multi-Unit Agreement contain a covenant not to compete that extends beyond termination of the franchise, and this provision might not be enforceable under California law.