In the Buona franchise agreement, what specific federal act governs all arbitration proceedings between the franchisor and franchisee?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
All arbitration proceedings between Franchisor and Franchisee shall be governed by the Federal Arbitration Act ("FAA") and no procedural arbitration issues are to be resolved pursuant to any state statutes, regulations or common law.
Except to the extent governed by the FAA, the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C.
Section 1051, et seq.) or other federal law, this Agreement shall be interpreted and governed under the laws of the State of Illinois and any dispute between the parties shall be governed by and determined in accordance with the substantive laws of the State of Illinois, which laws shall prevail if there is any conflict of law.
Franchisee and Franchisor have negotiated regarding a forum in which to resolve any disputes which may arise between them and have agreed to select a forum in order to promote stability in their relationship.
Therefore, if a claim is asserted in any legal proceeding involving Franchisee and/or any affiliate of Franchisee and Franchisor, its Affiliates and their respective officers, directors, members, managers, and employees, the parties agree that the exclusive
venue for disputes between them shall be in the state and federal courts of Cook County, Illinois or in arbitration in Cook County, Illinois pursuant to this Article XXIV, and each party waives any objection they may have to the personal jurisdiction of or venue in the state and federal courts of Cook County, Illinois or to arbitration in Cook County, Illinois pursuant to this Article XXIV. Franchisor, Franchisor's Affiliates, Franchisee and Franchisee's Affiliates each waive their rights to a trial by jury.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the Federal Arbitration Act (FAA) governs all arbitration proceedings between Buona and its franchisees. This means that any disputes that go to arbitration will be handled under the rules and guidelines established by the FAA, a federal law designed to facilitate and enforce arbitration agreements. The FDD specifies that no procedural arbitration issues are to be resolved pursuant to any state statutes, regulations, or common law.
This is significant for a prospective Buona franchisee because it ensures that arbitration will be conducted under a consistent federal standard, rather than being subject to varying state laws. The franchisee should become familiar with the FAA to understand their rights and obligations in case of a dispute leading to arbitration. This also means that the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Section 1051, et seq.) or other federal law, this Agreement shall be interpreted and governed under the laws of the State of Illinois.
Furthermore, the agreement stipulates that the venue for disputes, whether in court or arbitration, will be in Cook County, Illinois. Both Buona and the franchisee waive their rights to a trial by jury. The franchisee should consider the implications of arbitrating in Illinois, as it may involve travel and associated costs if the franchisee is located elsewhere. It is also important to note that the franchisee and Buona agree that arbitration will be conducted on an individual basis only, and not on a joint, collective or class-wide basis.