Can Bigfoot Forestry require arbitration or litigation to be conducted outside of the franchisee's state?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
- 24.1. Governing Law. Except as governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. §§ 1051, et seq.), this Agreement and the franchise relationship are governed by the Laws of South Carolina without reference to its principles of conflicts of law, but any South Carolina Law that regulates the offer and sale of franchises or business opportunities or governs the relationship of a franchisor and its franchisee will not apply unless its jurisdictional requirements are met independently without reference to this Section.
EXHIBIT "H"-1
STATE ADDENDA
[See Attached]
STATE ADDENDA AND AMENDMENTS TO FRANCHISE AGREEMENT, SUPPLEMENTAL AGREEMENTS AND FRANCHISE DISCLOSURE DOCUMENT FOR CERTAIN STATES
BACKGROUND AND PURPOSE
The following modifications are made to the Bigfoot Forestry Franchise Disclosure Document ("FDD" or "Disclosure Document") issued by Bigfoot Franchising, LLC ("we" or "us" or "franchisor") to franchisee ("you" or "franchisee") and may supersede certain portions of the Franchise Agreement between you and us dated __________________, 202 (the "Franchise Agreement"). When the term "Supplemental Agreements" is used, it means any area development agreement, area representative agreement, master franchise agreement, or similar agreement entered into between us and you, if applicable.
Certain states have laws governing the franchise relationship and franchise documents. Certain states require modifications to the FDD, Franchise Agreement, Supplemental Agreements and other documents related to the sale of a franchise. This State-Specific Addendum ("State Addendum") will modify these agreements to comply with the applicable state's laws. The terms of this State Addendum will only apply if you meet the requirements of the applicable state independently of your signing of this State Addendum. The terms of this State Addendum (but only the State Addendum for the applicable State) will override any inconsistent provision of the FDD, Franchise Agreement or any Supplemental Documents. This State Addendum only applies to the following states: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
Source: Item 23 — RECEIPT (FDD pages 42–162)
What This Means (2025 FDD)
According to the 2025 Bigfoot Forestry Franchise Disclosure Document, the franchise agreement is governed by South Carolina law. Specifically, section 24.1 states that the agreement and the franchise relationship are governed by the laws of South Carolina, without regard to its conflict of law principles, except for certain South Carolina laws related to franchising that would only apply if their jurisdictional requirements are independently met.
This means that any legal disputes arising from the franchise agreement might be subject to South Carolina law, potentially requiring franchisees to engage in litigation or arbitration in South Carolina, regardless of their own state of residence or the location of their Bigfoot Forestry franchise. This could create additional costs and logistical challenges for franchisees who are not located in South Carolina, as they may need to travel to South Carolina for hearings, hire South Carolina-based attorneys, and navigate the South Carolina legal system.
However, Exhibit H-1, the State Addenda, modifies the Franchise Agreement to comply with the applicable state's laws for certain states, including California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. The terms of the State Addendum will override any inconsistent provision of the FDD, Franchise Agreement or any Supplemental Documents, but only the State Addendum for the applicable State. Therefore, franchisees in those states may have some protection against being forced to litigate or arbitrate in South Carolina if their state's laws prohibit such a requirement.