To which courts do the parties irrevocably consent to jurisdiction in disputes related to the Bft agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the obligation to submit to binding arbitration under Section 12.D above, Franchisor and Developer agree that all controversies, disputes, or claims between them or any Franchisor Parties and Developer Parties arising out of or related to this Agreement or any other agreement between a Franchisor Party and a Developer Party or their relationships with each other must be commenced exclusively in state or federal court closest to Franchisor's (or its successor's or assign's, as applicable) then-current principal place of business (currently, Irvine, California), and the Parties irrevocably consent to the jurisdiction of those courts and waive any objection to either the jurisdiction of or venue in those courts.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, both the franchisor and the developer (franchisee) agree that any disputes or claims arising from the agreement or their relationship must be initiated exclusively in a state or federal court closest to Bft's principal place of business. Currently, Bft's principal place of business is located in Irvine, California. Therefore, both parties irrevocably consent to the jurisdiction of those courts and waive any objections to the jurisdiction or venue in those courts.
This means that if a Bft franchisee has a dispute with the company, they will likely need to pursue legal action in California, regardless of where their franchise is located. This could increase the cost and complexity of resolving disputes for franchisees who are not located near Irvine, California. Franchisees should factor in potential travel and legal costs associated with litigating in California when evaluating the franchise opportunity.
However, this jurisdiction clause is subject to the obligation to submit to binding arbitration. Also, there are exceptions for franchisees in North Dakota and Rhode Island, where local state laws may override this clause, particularly concerning claims arising under their respective franchise investment laws. In North Dakota, the developer may bring an action in North Dakota for claims arising under the North Dakota Franchise Investment Law. In Rhode Island, Rhode Island law will apply to claims arising under the Rhode Island Franchise Investment Act.