How does Item 17 of the Canine Dimensions Disclosure Document address 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.
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For the purposes of Cal. Bus. & Prof.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, Item 22 includes state-specific addenda that address binding arbitration. For instance, the addendum for California states that the franchise agreement requires binding arbitration, which will occur in Florida, with the franchisee and franchisor bearing the costs. It advises prospective franchisees to seek legal counsel to understand how California and federal laws might apply to venue restrictions outside of California. It also notes that the Federal Arbitration Act may preempt California Business and Professions Code Section 20040.5 relating to forum selection clauses restricting venue outside the state of California or arbitration, but that Section 20040.5 may still apply to any provision relating to judicial proceedings. Finally, it clarifies that a binding arbitration provision may not be enforceable under contract defenses like fraud, duress, or unconscionability.
For franchisees in Illinois, any franchise agreement provision that designates jurisdiction and venue outside of Illinois is void, although the agreement can stipulate that arbitration occurs outside the state.
For franchisees in Minnesota, the addendum states that any provision in the agreement that requires waiving rights to any procedure, forum, or remedies provided by Minnesota law is deleted, but this does not affect the obligation in the agreement relating to arbitration.
Finally, for franchisees in Virginia, the addendum states that additional statements are added to Item 17.h: "Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable."