Can the Bw Premier Collection franchise agreement require arbitration or litigation to be conducted outside of the franchisee's state?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) A provision requiring that arbitration or litigation be conducted outside this state. This shall not preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state.
ILLINOIS
Illinois law governs the agreements between the parties to this franchise.
Section 4 of the Illinois Franchise Disclosure Act provides that any provision in a franchise agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a franchise agreement may provide for arbitration outside of Illinois.
Minn. Stat. Sec. 80C.21 and Minn. Rule 2860.4400J might prohibit us from requiring litigation to be conducted outside Minnesota.
Notwithstanding the foregoing, to the extent required by applicable law, Rhode Island law will apply to claims arising under the Rhode Island Franchise Investment Act. Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."
In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. In addition, if litigation is not precluded by the Distribution Agreement, a Hotel Owner may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to the 2025 Bw Premier Collection FDD, the franchise agreement's stipulations regarding the location of arbitration or litigation proceedings vary depending on the franchisee's state. In general, a provision requiring arbitration or litigation to be conducted outside of the franchisee's state may be included in the franchise agreement. However, this does not prevent the franchisee from agreeing to conduct arbitration outside of their state at the time of arbitration.
For franchisees in Illinois, the Illinois Franchise Disclosure Act states that any provision in a franchise agreement that designates jurisdiction or venue outside the State of Illinois is void. However, the franchise agreement can still provide for arbitration outside of Illinois. For franchisees in Minnesota, Minnesota statutes might prohibit Bw Premier Collection from requiring litigation to be conducted outside Minnesota.
For franchisees in Rhode Island, the Rhode Island Franchise Investment Act stipulates that any provision in a franchise agreement restricting jurisdiction or venue to a forum outside of Rhode Island or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act. For franchisees in Washington, any arbitration or mediation involving a franchise purchased in Washington will occur either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. If litigation is not precluded by the Distribution Agreement, a Hotel Owner may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
Prospective Bw Premier Collection franchisees should carefully review Item 23 and consult with a legal professional to understand the specific implications of these provisions in their state and how they may affect their rights and obligations under the franchise agreement.