Where will mediation be held in the event of a dispute with Casa De Corazon?
Casa_De_Corazon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Section in | ||
|---|---|---|
| Franchise, Development Agreement, or Other | ||
| Provision | Agreements | Summary |
| a. Length of the franchise term | Franchise Agreement - Section 2(a) Development Agreement - Section 5 | 10 years. Expires on date when last Center under the Development Schedule opens, or should have opened, for business, or the Development Agreement is terminated (subject to applicable state law). |
| b. Renewal or extension of the term | Franchise Agreement - Section 2(b) Development Agreement - None | If you are in good standing and you meet our conditions, you can renew your franchise for an additional 10-year period. There are no renewal rights under the Development Agreement. |
| c. Requirements for you to renew or extend | Franchise Agreement - Section 2(c) Development Agreement - None | Give written notice, sign new franchise agreement (which may contain materially different terms and conditions than your original Franchise Agreement); upgrade your Center and update your equipment to comply with then-current standards; provide us with evidence of property control; sign general release, subject to applicable state law; pay renewal fee. Not Applicable |
| d. Termination by you | Franchise Agreement - Section 21(f) Development Agreement - None Section in Franchise, Development Agreement, or Other | You may terminate on 10 days’ notice to us, if you are in compliance with the Franchise Agreement and we materially breach the agreement and fail to cure the breach within 30 days after you give us notice of the breach. You may not terminate (subject to applicable state law). |
| Provision | Agreements | Summary |
| v. Choice of forum | Franchise Agreement - Section 22(b) and (e) Development Agreement - Section 7(d) | Mediation to be held in a metropolitan area with a population of at least 250,000 people that is not located within 200 miles of your Center or our principal office. In most cases, litigation must be brought in the state or federal courts located in Hennepin County, Minnesota, except as provided in a state specific addendum. Subject to state law, mediation to be held in accordance with requirements of franchise agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–43)
What This Means (2025 FDD)
According to Casa De Corazon's 2025 Franchise Disclosure Document, mediation will occur in a metropolitan area with a population of at least 250,000. This location must not be within 200 miles of the franchisee's Casa De Corazon center or Casa De Corazon's principal office. The FDD also specifies that litigation, in most cases, must be brought in the state or federal courts located in Hennepin County, Minnesota, except as provided in a state-specific addendum. The mediation will be held in accordance with the requirements outlined in the franchise agreement, subject to state law.
This means that if a dispute arises between a Casa De Corazon franchisee and the company, the initial step involves mediation in a neutral metropolitan area. The specific location will be determined based on population size and distance from both the franchise location and Casa De Corazon's headquarters to ensure impartiality. This process aims to resolve conflicts outside of court, potentially saving both parties time and legal expenses.
However, if mediation fails to resolve the dispute, the FDD indicates that litigation is likely to occur in Hennepin County, Minnesota, which could present a disadvantage for franchisees located far from Minnesota due to travel costs and familiarity with local laws. It is important to note the clause "except as provided in a state-specific addendum," suggesting that certain states may have different requirements regarding the location of litigation. Prospective franchisees should carefully review any state-specific addenda to understand how these provisions might be modified in their specific state.
It is also important to note that these dispute resolution terms are subject to state law, meaning that certain aspects of the mediation or litigation process could be influenced or superseded by state-specific regulations. Franchisees should consult with a legal professional to fully understand their rights and obligations in the event of a dispute with Casa De Corazon.