If litigation is necessary, does the Bumper Man franchise agreement specify that it must occur in Texas?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| u. | Section 24 | Except for certain claims, all disputes must be |
| Dispute resolution by | mediated, and if not resolved, arbitrated in Texas | |
| arbitration or mediation | unless contrary to applicable state law. | |
| v. Choice of forum | Section 24(c)(7) | Litigation must be in the U.S. District Court for the Northern District of Texas, Dallas Division or District Courts of Texas serving Dallas County, Texas (subject to state law). |
| w. | Section 24(b) | Texas law applies (subject to state law) |
| Choice of law |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–38)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, the franchise agreement specifies that litigation must occur in Texas. Specifically, any litigation must take place in the U.S. District Court for the Northern District of Texas, Dallas Division, or the District Courts of Texas serving Dallas County, Texas, but this is subject to state law.
This means that if a Bumper Man franchisee has a legal dispute with the franchisor that results in litigation, the lawsuit must be filed in one of the specified courts in Texas, regardless of where the franchisee's business is located. This could increase costs for a franchisee who does not live in Texas, as they would need to travel to Texas for court proceedings and potentially hire a Texas-based attorney.
The FDD also states that Texas law governs the franchise agreement, subject to state law. This means that Texas law will be used to interpret the franchise agreement and resolve any disputes. It is common in franchising for the franchise agreement to specify a particular state's laws to govern the agreement, as this provides clarity and predictability for both the franchisor and franchisee. However, the specification that both choice of forum and choice of law are 'subject to state law' introduces some ambiguity, as this may mean that certain state laws where the franchisee operates could override these provisions.