What is the effect of court decisions on the Black Bear Diner franchise agreement in Washington?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Arbitration. This Agreement is a written agreement evidencing a transaction involving commerce and is, therefore, subject to the terms and provisions of the Federal Arbitration Act, Title 9 of the United States Code. All disputes arising out of or relating to this Agreement, or to any other agreements between the parties or with regard to interpretation, formation or breach of this or any other agreement between the parties, shall be settled by binding arbitration conducted in Redding, California, or such place as may be mutually agreeable to the parties, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. or at such other place as may be mutually agreeable to the parties. The decision of the arbitrators will be final and binding on all parties to the dispute; however, the arbitrators may not under any circumstances: (i) stay the effectiveness of any pending termination of this Agreement; (ii) assess punitive or exemplary damages; or (iii) make any award which extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance. A judgment may be entered upon the arbitration award by any state or federal court in California or the state within which the Development Area is located. The prevailing party in any action or proceeding arising under, out of, in connection with, or in relation to this Agreement or the Black Bear Diner restaurant conducted pursuant to this Agreement shall be entitled to recover its reasonable attorneys' fees and costs.
DEVELOPER EXPRESSLY ACKNOWLEDGES THAT DEVELOPER HAS READ THE TERMS OF THIS BINDING ARBITRATION PROVISION AND SPECIFICALLY AFFIRMS THAT THIS PROVISION IS ENTERED INTO WILLINGLY AND VOLUNTARILY AND WITHOUT ANY FRAUD, DURESS OR UNDUE INFLUENCE ON THE PART OF FRANCHISOR OR ANY OF FRANCHISOR'S AGENTS OR EMPLOYEES.
13.3 Consent to Jurisdiction
The parties agree that any action brought by Developer against Franchisor in any court, whether federal or state, shall be brought within such state and in the judicial district in which Franchisor has its principal place of business. Any action brought by Franchisor against Developer in any court, whether federal or state, may be brought within the state and judicial district in which
Franchisor has its principal place of business. The parties do hereby waive all questions of personal jurisdiction or venue for the purposes of carrying out this provision.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 FDD, the Black Bear Diner franchise agreement specifies how disputes are handled and where legal actions can be initiated, which can affect franchisees in Washington. The franchise agreement is subject to the Federal Arbitration Act, meaning disputes will be settled through binding arbitration. This arbitration will take place in Redding, California, or another mutually agreed-upon location. The arbitrator's decision is final, but they cannot prevent a termination of the agreement, award punitive damages, or change the terms of the agreement. A judgment on the arbitration award can be entered in any state or federal court in California or the state where the development area is located, which would include Washington. The prevailing party in any legal action is entitled to recover reasonable attorney's fees and costs.
Furthermore, the FDD states that if a Black Bear Diner franchisee (referred to as a 'Developer' in the document) initiates legal action against Black Bear Diner, the action must be brought in the state and judicial district where Black Bear Diner has its principal place of business. Conversely, if Black Bear Diner initiates legal action against the Developer, it can do so in the state and judicial district where Black Bear Diner's principal place of business is located. Both parties waive any objections to personal jurisdiction or venue to ensure this provision is enforced.
For a prospective franchisee in Washington, this means that any legal disputes with Black Bear Diner will likely be resolved through arbitration in California, unless another location is mutually agreed upon. Additionally, any court actions initiated by the franchisee must be filed in California, while Black Bear Diner has the option to file in California. This arrangement could create additional costs and logistical challenges for a Washington-based franchisee involved in a legal dispute with Black Bear Diner.