Is the dispute resolution by arbitration or mediation provision in the Boulder Designs Franchise Agreement subject to state law?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the | Summary | |
|---|---|---|---|
| Franchise Agreement | |||
| a. Length of the franchise | Section 4.1 | 10 years. | |
| term | |||
| b. Renewal or extension of | Section 4.2 | Additional 10-year term if certain conditions | |
| the term | are met. | ||
| Provision | Section in the Franchise Agreement | Summary or modify their business relationship with Us, our Affiliate(s) or any other franchisee. | |
| s. Modification of the | Sections 9.2 and | The Franchise Agreement can be modified | |
| agreement | 22.6 | only by written agreement between you and us. | |
| t. Integration/merger clause | Section 22.6 | Only the terms of the Franchise Agreement and all exhibits to the Franchise Agreement are binding (subject to state law). Any representations or promises made outside of the disclosure document and the Franchise Agreement may not be enforceable. | |
| u. Dispute resolution by arbitration or mediation | Section 23.7 | Except for actions or claims for injunctive relief or specific performance or relating to the Marks, Trade Secrets or Confidential Information, all disputes must be mediated in McLennan County, Texas. (Subject to state law) |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–44)
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, the dispute resolution process, which involves mediation, is subject to state law. Specifically, Section 23.7 of the Franchise Agreement mandates that all disputes, excluding those seeking injunctive relief, specific performance, or relating to trademarks, trade secrets, or confidential information, must be mediated in McLennan County, Texas. However, this requirement is explicitly subject to state law.
This means that while the Franchise Agreement specifies mediation in Texas as the primary method for resolving disputes, state laws may influence or override certain aspects of this process. For example, state laws could dictate the enforceability of the mediation clause, the procedures for conducting mediation, or the remedies available to franchisees.
Prospective Boulder Designs franchisees should be aware that the application of state law could potentially modify the dispute resolution process outlined in the Franchise Agreement. It is advisable to consult with a legal professional to understand how the laws of their specific state might affect the mediation process and their rights as a franchisee.