In the event of litigation with C12 Group, in which forum must it be conducted?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
| u. Dispute resolution by arbitration or mediation | XII, Exhibit F | All matters can be appealed up through C12’s defined three-step dispute resolution process which culminates in Christian arbitration pursuant to which the parties engage three Bible-believing Christian arbitrators as follows: one selected by the franchisee, one selected by C12, and one selected by such two arbitrators. The remedy recommended by the arbitration panel will be binding and final with no further recourse by either party. Subject to state law. |
|---|---|---|
| v. Choice of forum | XII, Exhibit F | Litigation must be conducted in Texas unless otherwise stated in Exhibit F for certain State Disclosures (subject to applicable state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–40)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, litigation must be conducted in Texas, unless otherwise stated in Exhibit F for certain State Disclosures, and is subject to applicable state law. This means that if a C12 Group franchisee has a legal dispute with the franchisor that cannot be resolved through other means, the lawsuit will generally need to be filed and pursued in the state of Texas.
This requirement could increase costs for franchisees who do not reside in Texas, as they may need to travel to Texas for court proceedings and hire legal counsel familiar with Texas law. The FDD indicates that Exhibit F may contain exceptions for certain states, so prospective franchisees should carefully review that exhibit to determine if there are any specific forum requirements applicable to their state.
It is also important to note that the FDD specifies that Texas law will govern the franchise agreement, subject to applicable state law. This means that Texas law will be used to interpret and enforce the agreement, which could have implications for franchisees depending on the laws of their own state. Prospective franchisees should seek legal advice to understand the potential implications of these provisions.