Where will arbitration occur for Brain Balance franchise disputes?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The Franchise Agreement requires binding arbitration. The arbitration will occur in SWilmington, Delaware, with each party bearing its own costs. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, the location for arbitration related to franchise disputes depends on whether the franchisee operates in California. For franchisees operating Brain Balance centers outside of California, the standard franchise agreement mandates that binding arbitration will occur in Wilmington, Delaware. Each party involved will be responsible for covering their own costs associated with the arbitration.
However, for franchisees who operate Brain Balance centers within California, the California Addendum to the franchise agreement stipulates that the governing law and choice of law will be the California Franchise Investment Law and the California Franchise Relations Act, regardless of any conflicting choice of law or dispute resolution venue stated elsewhere in the agreement.
Furthermore, the addendum explicitly states that prospective franchisees should seek legal counsel to understand how California and federal laws might apply to franchise agreement provisions that restrict the venue to a location outside of California. This is particularly relevant due to California laws that may void waivers of rights under the Franchise Investment Law and the Franchise Relations Act.