Under what circumstances can Bombs Away Franchising bring a claim in court instead of arbitration?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
lief. Either party may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Either party also may, without waiving any remedy or right to arbitrate under this Agreement, seek from any court having jurisdiction any interim or provisional injunctive relief.
- (d) Intellectual Property Claims. Either party may bring a claim involving an alleged infringement of any of Bombs Away Franchising's intellectual property rights in a court authorized to hear such claims under Section 17.5 of this Agreement.
- (e) Confidentiality. All documents, information, and results pertaining to any arbitration or lawsuit will be confidential, except as required by law or as required for Bombs Away Franchising to comply with laws and regulations applicable to the sale of franchises.
- (f) Performance During Arbitration or Litigation.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, both Bombs Away and the franchisee generally resolve disputes through arbitration. However, Bombs Away Franchising retains the right to pursue certain claims in court. Specifically, Bombs Away may bring a claim in court involving an alleged infringement of any of its intellectual property rights.
This is a common exception to arbitration clauses in franchise agreements. Intellectual property, such as trademarks, logos, and proprietary systems, are critical assets for a franchise system. Bombs Away needs to be able to act quickly and decisively to protect these assets from infringement, and court proceedings may be a more effective way to do so than arbitration.
For any legal proceeding not required to be submitted to arbitration, the lawsuit will be brought in the United States District Court where Bombs Away Franchising's headquarters is located. If there is no federal jurisdiction over the dispute, the parties agree that any such legal proceeding will be brought in the court of record of the state and county where Bombs Away Franchising's headquarters is then located. Each party consents to the jurisdiction of such courts and waives any objection that it, he or she may have to the laying of venue of any proceeding in any of these courts.