Does the Body20 franchise agreement require the franchisee to submit to the jurisdiction of specific courts for disputes not subject to arbitration?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
in equity.
- 15.13 Covenant of Further Assurances. You must execute any legal document or termination agreement that we prescribe to effectuate the termination of this Agreement and shall furnish to us, within 30 days after the effective date of termination, written evidence satisfactory to us of your compliance with all of the foregoing obligations.
Section 16 Dispute Resolution and Governing Law.
16.1 Governing Law. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.). Except to the extent governed by the Federal Arbitration Act or other federal law, this Agreement will be governed by, construed, and enforced in accordance with the laws of the State of Delaware, without regard to its conflict of laws principles, except that any state law (a) regulating the sale of franchises, licenses, or business opportunities, (b) governing the relationship of a franchisor and its franchisee, or (c) involving
unfair or deceptive acts or practices will not apply unless its jurisdictional requirements are met independently without reference to this Section.
- 16.2 Mandatory Pre-Litigation Mediation. Except as otherwise provided in this Section, prior to filing any proceeding to resolve any dispute based upon, arising out of, or in any way connected with this Agreement, a party must submit the dispute for mediation.
- (a) Conduct of Mediation. All parties must attend and participate in the mediation. It is the intent of the parties that mediation shall be held not later than 14 days after a written request for mediation shall have been served on the other parties. The mediation will be held before one mediator selected by the parties, and if the parties cannot agree upon the mediator, then a mediator selected by the American Arbitration Association ("AAA"). The mediation shall not last more than one day and shall be held in the metropolitan area of our thencurrent principal place of business. The mediation shall be governed by the rules of the AAA.
- (b) Post-Mediation. If we and you do not resolve our dispute, then thereafter any party may file for litigation or arbitration, as applicable in accordance with the terms of this Agreement.
- (c) Exceptions to Mediation.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, the franchise agreement's jurisdiction for disputes not subject to arbitration varies by state. Generally, the agreement is governed by Delaware law, but this is modified by state-specific addenda.
For franchisees in Illinois, any provision designating jurisdiction and venue outside of Illinois is void, although arbitration may occur outside of Illinois. In Minnesota, the franchise agreement cannot require litigation outside of Minnesota, except in specific cases. Maryland franchisees have the right to bring lawsuits in Maryland for claims arising under Maryland franchise law, despite arbitration obligations. Similarly, Rhode Island franchisees can sue in Rhode Island for claims arising under the Rhode Island Franchise Investment Act, subject to arbitration obligations.
These stipulations ensure that Body20 franchisees are not unduly burdened by having to litigate disputes in distant or inconvenient forums, and that their rights under state franchise laws are protected. Prospective franchisees should carefully review the addendum specific to their state to understand their rights and obligations regarding dispute resolution and governing law.