What is the effect of the waiver of class actions on Bombs Away franchisees?

According to Bombs Away's 2024 Franchise Disclosure Document, franchisees waive the right to participate in class action lawsuits against the company. Specifically, Item 17.3 states that any claims must be resolved on an individual basis through arbitration or litigation, preventing franchisees from joining together to pursue collective legal action. This waiver is a standard practice in franchising, intended to limit the franchisor's exposure to large-scale lawsuits.

For a prospective Bombs Away franchisee, this means that any legal disputes with the franchisor must be pursued individually, which can be more expensive and time-consuming than joining a class action. While individual arbitration or litigation is still an option, the franchisee bears the full responsibility for legal costs and the burden of proof. This could be a significant disadvantage if the dispute involves a common issue affecting multiple franchisees, as there is no mechanism for sharing resources or presenting a unified case.

However, it is important to note that the New York Rider to the Franchise Agreement includes a provision stating that franchisees are not required to waive compliance by Bombs Away Franchising with any provision of New York General Business Law. Similarly, the Maryland Rider specifies that representations requiring franchisees to assent to a release, estoppel, or waiver of liability are not intended to act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Law. These state-specific riders may offer some protection to franchisees in those states, despite the general waiver of class actions in the franchise agreement.

Prospective franchisees should carefully consider the implications of this waiver, especially in light of the costs and complexities of individual legal action. They may want to consult with an attorney to understand their rights and options in the event of a dispute with Bombs Away. Additionally, franchisees should be aware of any state-specific laws or riders that may provide additional protections or modify the terms of the waiver.