What law governs all arbitration proceedings between Buona and its franchisees?
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. The FDD specifies that no procedural arbitration issues will be resolved according to any state statutes, regulations, or common law. This means that the arbitration process will be handled at the federal level, providing a consistent legal framework across different states.
This is significant for prospective Buona franchisees because it establishes a clear legal standard for resolving disputes through arbitration. The FAA is generally designed to promote and enforce arbitration agreements, which can offer a quicker and more cost-effective alternative to traditional litigation. However, franchisees should be aware that the FAA's scope is limited, and certain aspects of the agreement, outside of arbitration procedure, may still be subject to state law, specifically the laws of Illinois.
Furthermore, the agreement specifies that the substantive laws of the State of Illinois will govern the interpretation of the franchise agreement, except where the FAA, the United States Trademark Act, or other federal law applies. This means that while the arbitration process itself is federally regulated, the underlying legal principles used to interpret the agreement will be those of Illinois. Franchisees should consider the implications of both federal arbitration law and Illinois state law when evaluating the franchise agreement.
Buona and its franchisees also agree to venue and jurisdiction in Cook County, Illinois for any legal proceedings or arbitrations. This means that any disputes will be resolved in either the state and federal courts of Cook County, Illinois, or in arbitration in Cook County, Illinois. Both Buona and its franchisees waive their rights to a trial by jury.