For Brain Balance franchise disputes, where does the company and franchisee consent to personal jurisdiction?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
20.01. Except as provided in Section 20.02 below, COMPANY and FRANCHISEE agree that any and all disputes between them, and any claim by either party that cannot be amicably settled (including tort as well as contract claims, claims based upon any federal, state, or local statute, law, order, ordinance, or regulations, and claims arising from any relationship prior to, at the time of entering, during the term of, or upon or after expiration or termination of this Agreement) except for claims relating to the Marks or other service marks or commercial symbols of COMPANY, shall be determined solely and exclusively by arbitration under the Federal Arbitration Act, as amended, and in accordance with the rules then obtaining of the American Arbitration Association or any successor at its office located in San Francisco, ou, unless the parties otherwise agree in writing. COMPANY and FRANCHISEE consent to personal jurisdiction and hereby waive all objections to personal jurisdiction or venue for the purpose of carrying out the purposes of this Paragraph 20.01. The arbitrator(s) may not under any circumstance: (i) stay the effectiveness of any pending termination; (ii) assess punitive, speculative, or exemplary damages; or (iii) make any award that extends, modifies, or suspends any lawful term of this Agreement or any reasonable standard of business performance set by COMPANY in good faith. The arbitrator(s) shall be limited to the issues in dispute between COMPANY and FRANCHISEE and a dispute between any other franchisee and COMPANY shall not be considered in the same arbitration proceeding or by the same arbitrator(s). The parties shall each bear their own expense, including but not limited to all fees and expenses of the arbitrator(s), the American Arbitration Association, attorneys, and accountants. Judgment upon any award of the arbitrator(s) shall be conclusive and binding and shall be entered in a court of competent jurisdiction.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, both Brain Balance and the franchisee consent to personal jurisdiction in the event of disputes. Specifically, they agree to resolve disputes through arbitration under the Federal Arbitration Act, using the rules of the American Arbitration Association or any successor. The arbitration proceedings will take place at the association's office in San Francisco, CA, unless both parties agree otherwise in writing.
This agreement to personal jurisdiction and waiver of objections means that if a dispute arises, a franchisee will likely need to travel to San Francisco for arbitration, which could increase the costs associated with resolving the dispute. It is important to note that claims relating to Brain Balance's trademarks or service marks are excluded from this arbitration agreement.
The arbitrator's powers are limited, as they cannot stay any pending termination, assess punitive damages, or modify any lawful term of the agreement. The arbitrator is restricted to the specific issues in dispute between Brain Balance and the franchisee, and disputes involving other franchisees will not be considered in the same proceeding. Each party is responsible for their own expenses, including legal and arbitration fees.
This arbitration clause is a common practice in franchising, intended to provide a structured and potentially faster way to resolve conflicts compared to litigation. However, franchisees should be aware of the location of the arbitration and the limitations placed on the arbitrator's authority, as these factors can impact the outcome and cost of resolving any disputes with Brain Balance.