Where will the binding arbitration required by the Brain Balance Franchise Agreement occur?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
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, for franchisees operating in California, the required binding arbitration will occur in Wilmington, Delaware. Each party will bear its own costs associated with the arbitration. This information is specifically outlined in Exhibit 7, the California Addendum to the Franchise Agreement.
It is important to note that the California Addendum explicitly addresses the governing law and choice of law for franchisees operating in California, stating that the California Franchise Investment Law and the California Franchise Relations Act will govern, regardless of any conflicting language in the franchise agreement. However, the document also encourages prospective franchisees to seek legal counsel to understand the applicability of California and federal laws to provisions restricting venue to a forum outside of California.
For franchisees outside of California, the FDD does not specify where arbitration will occur. A prospective franchisee should consult the franchise agreement and/or ask Brain Balance directly where arbitration would be held for agreements not covered by the California addendum.