In Michigan, can C3 Wellness Spa require litigation to be conducted outside of the state?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
MICHIGAN FDD ADDENDUM
Amendments to the C3 Wellness Franchise Disclosure Document
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS.
IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
- A.
A prohibition of your right to join an association of Franchisees.
- B.
A requirement that you assent to a release, assignment, novation, waiver or estoppel that deprives you of rights and protections provided in this act.
This shall not preclude you, after entering into a Franchise Agreement, from settling any and all claims.
- C.
A provision that permits us to terminate a franchise before the expiration of this term except for good cause.
Good cause shall include your failure to comply with any lawful provision of the Franchise Agreement and to cure the failure after being given written notice of the failure and a reasonable opportunity, which in no event need be more than 30 days, to cure the failure.
- D.
A provision that permits us to refuse to renew a franchise without fairly compensating you by repurchase or other means for the fair market value at the time of expiration of your inventory, supplies, equipment, fixtures and furnishings.
Personalized materials that have no value to us and inventory, supplies, equipment, fixtures and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the Michigan FDD Addendum states that the State of Michigan prohibits certain unfair provisions that are sometimes in franchise documents. These provisions are void and cannot be enforced against the franchisee. While the addendum does not specifically address litigation, it does state that a franchisee cannot be deprived of rights and protections provided in the act.
It is important to note that the Michigan FDD Addendum lists several specific provisions that are prohibited, including a prohibition of the franchisee's right to join an association of franchisees, a requirement that the franchisee assent to a release, assignment, novation, waiver, or estoppel that deprives them of rights and protections, a provision that permits the franchisor to terminate the franchise before the expiration of its term except for good cause, and a provision that permits the franchisor to refuse to renew a franchise without fairly compensating the franchisee.
While the Michigan Addendum does not directly address out-of-state litigation clauses, prospective franchisees should consult with a legal professional to fully understand their rights under Michigan law and how they apply to the C3 Wellness Spa franchise agreement. It would be prudent to inquire with C3 Wellness Spa about their policies and practices regarding dispute resolution and litigation venue to ensure full compliance with Michigan law.