Does the Canine Dimensions franchise agreement require binding arbitration?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
e Act of 1934, 15 U.S.C.A. 79a et seq., suspending or expelling such persons from membership in such association or exchange.
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- The franchise agreement requires binding arbitration. The arbitration will occur in Florida with the costs being borne by the franchisee and franchisor. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5 Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California. Business and Professions Code Section 20040.5 relating to forum selection clauses restricting venue outside the state of California or arbitration may be preempted by the Federal Arbitration Act. Section 20040.5 may still apply to any provision relating to judicial proceedings. A binding arbitration provision may not be enforceable under generally applicable contract defenses, such as fraud, duress, or unconscionability.
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- The Franchise Agreement require application of the laws of Florida. This provision may not be enforceable under California law.
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- You must sign a general release if you renew or transfer your franchise. California Corporation Code 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code 31000 through 31516). Business and Professions
Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043).
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- THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.
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- The Franchise Agreement contains a liquidated damages clause. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions's 2025 Franchise Disclosure Document, the franchise agreement requires binding arbitration. However, this is subject to certain state-specific addenda that may modify or supersede this requirement depending on where the franchisee is located. For instance, the addendum for California states that the arbitration will occur in Florida and the costs will be borne by both the franchisee and franchisor. It also advises prospective franchisees to seek legal counsel to determine the applicability of California and federal laws. The addendum for Minnesota states that any provision in the agreement requiring a franchisee to waive their rights to any procedure, forum, or remedies provided by the laws of Minnesota is deleted, but this does not affect the obligation relating to arbitration.
For franchisees in Illinois, the FDD states that while the franchise agreement may provide for arbitration to take place outside of Illinois, any provision designating jurisdiction and venue in a forum outside of Illinois is void. This suggests that while arbitration itself may be required, the location of such arbitration may be subject to legal restrictions.
These state-specific addenda highlight the importance of carefully reviewing the entire Franchise Agreement and any state-specific addenda with legal counsel to understand the full scope of the arbitration requirements and how they apply to a specific situation. The interplay between the general arbitration requirement and the state-specific modifications can significantly impact a franchisee's rights and obligations.