What sections of the Black Bear Diner Franchise Agreement address litigation or arbitration requirements that may not be enforceable for claims arising under specific California laws?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the requirements of the California Franchise Investment Law, Cal. Corp. Code §§31000-3516 and the California Franchise Relations Act, Cal. Bus. And Prof. Code §§20000-20043, the Franchise Agreement for BBDI LLC shall be amended as follows:
- d. Sections 22.2 and 22.7 of the Franchise Agreement require litigation or arbitration to be conducted in the State of California; the requirement may not be enforceable for claims arising under the California Franchise Investment Law or the California Franchise Relations Act.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, there are specific sections within the Franchise Agreement that address litigation or arbitration, but these may not be fully enforceable for claims arising under California laws such as the California Franchise Investment Law or the California Franchise Relations Act.
Specifically, Section 22.2 and 22.7 of the Black Bear Diner Franchise Agreement stipulate that any litigation or arbitration must occur within the State of California. However, the FDD addendum clarifies that this requirement might not be enforceable if the claims are based on the California Franchise Investment Law or the California Franchise Relations Act. This means that a franchisee might have the right to pursue legal action or arbitration outside of California, or under different terms, if their claim falls under these specific California laws.
This provision is included as an addendum to the standard Franchise Agreement to ensure compliance with California law, which aims to protect franchisees. Prospective franchisees should be aware of this addendum, especially if they anticipate operating a Black Bear Diner franchise in California, as it could affect their rights and options in case of a dispute with the franchisor. It is advisable to seek legal counsel to fully understand the implications of these clauses and how they interact with California franchise laws.