Who bears the costs of arbitration according to the C12 Group FDD for C12 Group?

According to the 2025 C12 Group Franchise Disclosure Document, in the state of California, the franchise agreement mandates binding arbitration, which will take place in Texas. The FDD specifies that each party involved in the arbitration is responsible for covering their own respective costs. This means that a franchisee would need to budget for their legal representation, travel, and other expenses related to presenting their case in arbitration, regardless of the outcome.

This arrangement could potentially create a financial burden for franchisees, especially if the arbitration is lengthy or complex. Franchisees are advised to seek independent legal counsel to fully understand the implications of the arbitration clause, particularly in light of California and federal laws that may apply. Consulting with an attorney can help a franchisee assess the potential costs and risks associated with this provision.

It's important to note that the enforceability of certain provisions, such as those restricting venue to a forum outside of California, may be subject to scrutiny under California law. Therefore, franchisees should be aware of their rights and protections under state and federal laws, as these may override certain terms in the franchise agreement. The FDD explicitly encourages prospective franchisees to consult with legal counsel to determine the applicability of these laws.