What law governs matters relating to arbitration for Bft?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
16.1 Governing Law. Franchisor and Franchisee agree that all matters relating to arbitration will be governed by the substantive and procedural provisions of the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.), which they acknowledge and agree will supersede any conflicting provisions of any state's laws relating to arbitration.
Except to the extent governed by the Federal Arbitration Act, the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C.
Sections 1051et seq.), or other applicable federal laws, this Agreement and any other agreement between Franchisor (or its parents, affiliates, and subsidiaries) and Franchisee (or its parents, affiliates, and subsidiaries, if applicable), and the rights granted and relationships created thereunder, shall be governed by the internal laws of the State of California, without regard to its conflicts of laws rules, except that the provisions regarding competitive activities shall be interpreted and enforced in accordance with the laws of the state in which the Studio is located.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) governs all matters relating to arbitration between Bft and its franchisees. This Act supersedes any conflicting state laws regarding arbitration. This means that the procedures and substantive aspects of any arbitration will be determined by federal law, providing a consistent legal framework regardless of the franchisee's location.
This clause is significant for prospective Bft franchisees because it establishes a clear legal standard for resolving disputes through arbitration. The Federal Arbitration Act is generally favored by franchisors as it can offer a more streamlined and predictable process compared to varying state laws. Franchisees should familiarize themselves with the provisions of the Federal Arbitration Act to understand their rights and obligations in case of a dispute with Bft.
While the Federal Arbitration Act governs arbitration-related matters, the franchise agreement specifies that the internal laws of California govern the agreement itself, except where the Trademark Act or other federal laws apply. The exception to this is that provisions regarding competitive activities will be interpreted and enforced in accordance with the laws of the state in which the Bft studio is located. This ensures that local state laws regarding competition are respected, while maintaining uniformity in other contractual matters under California law.