Is the choice of law, non-binding mediation, binding arbitration, and consent to jurisdiction provision in Article 18.G of the Casiola Franchise Agreement subject to any exceptions?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
r and Franchisee cannot agree on a mediator then the mediator shall be selected by AAA. Mediation shall be conducted within 45 days of AAA's designation and/or acknowledgment of the selected mediator or such longer period as may be agreed to between Franchisor and Franchisee in writing and signed by each respective party. Franchisor and Franchisee shall each be responsible for their own costs associated with mediation and Franchisor and Franchisee shall each be responsible for and shall each pay 50% of the mediator's fee and AAA's mediation fees.
Notwithstanding the preceding paragraph, Franchisor and Franchisee agree this Sub-Article 18.G.(1) and, thereby, the prerequisite requirement of non-binding mediation, shall not, at Franchisor's election, apply to: (a) any claims or disputes related to or concerning a breach of this Agreement by Franchisee that, under the terms of this Agreement, may entitle Franchisor to the award of injunctive relief including, but not limited to, Franchisee's violation or purported violation of Article 6 of this Agreement; and/or (b) claims by either Franchisor or Franchisee under this Agreement that relates to either Franchisor's or Franchisee's failure to pay fees or other monetary obligations due under this Agreement.
(2) Arbitration – Subject to the prerequisite requirements of non-binding mediation as set forth in Sub-Article 18.G.(1), and, except at Franchisor's election, as to any claims or disputes related to or concerning a breach of this Agreement by Franchisee that, under the terms of this Agreement, may entitle Franchisor to the award of injunctive relief including, but not limited to, Franchisee's violation or purported violation of Article 6 of this Agreement, Franchisor and Franchisee agree that all disputes, controversies, and claims, arising from and/or related to this Agreement, the relationship between Franchisor and Franchisee, the System, and/or the validity of this Agreement and/or the Ancillary Agreements, shall be submitted, on demand of either Franchisor or Franchisee, to AAA for binding arbitration. Arbitration shall be conducted by one arbitrator in accordance with AAA's then current rules for commercial disputes, except as may be otherwise required in this Article 18.G. All arbitration proceedings shall be conducted in Orange County, Florida, or, if suitable AAA facilities are not available in Orange County,
Florida, then at a suitable AAA location selected by the arbitrator that is located closest to Orange County, Florida.
In connection with binding arbitration, Franchisor and Franchisee further agree that:
- (a) All matters relating to arbitration, will be governed by the United States Federal Arbitration Act, except as expressly or otherwise set forth in this Agreement;
- (b) The arbitration hearing shall be conducted within 180 days of the demand for arbitration;
- (c) The arbitrator shall render written findings of fact and conclusions of law;
- (d) Except as may be otherwise required and/or prohibited by this Agreement including, but not limited to Articles 18.I., 18.J., 18.N., 18.O., 18.R., 18.T., and 18.X. of this Agreement, the arbitrator has the right to award or include in his or her award any relief that he or she determines to be proper, including monetary damages, interest on unpaid sums, specific performance, injunctive relief, attorneys' fees, and costs and expenses as allowable under this Agreement. Notwithstanding the foregoing, under no circumstance shall the Arbitrator be authorized to award or declare the Licensed Marks to be descriptive or invalid;
- (e) They shall each be bound to the limitation's periods set forth in Article 18.I. of this Agreement and that, in any arbitration proceeding, Franchisor and Franchisee must each timely submit, within the same arbitration proceeding, any claim that would constitute a compulsory counterclaim as such claims are defined and set forth under Rule 13 of the United States Federal Rules of Civil Procedure. Any claim that is not submitted or filed as required shall be forever barred;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, Article 18.G, which covers choice of law, non-binding mediation, binding arbitration, and consent to jurisdiction, is subject to certain exceptions.
For instance, the requirement for non-binding mediation before arbitration does not apply at Casiola's election to claims regarding a franchisee's breach that could entitle Casiola to injunctive relief, including violations of Article 6 of the agreement, or to claims related to the failure to pay fees or other monetary obligations.
Additionally, amendments to the Casiola Franchise Agreement in certain states like Illinois, Maryland, North Dakota, and Washington introduce further exceptions. In Illinois, the law dictates that any provision designating jurisdiction or venue outside of Illinois is void, although arbitration outside Illinois is permitted. Maryland allows franchisees to bring lawsuits in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, regardless of the arbitration provision. In North Dakota, provisions requiring franchisees to consent to the jurisdiction of courts outside of North Dakota may not be enforceable, and North Dakota law will apply for North Dakota franchisees. Washington law states that the Washington Franchise Investment Protection Act will prevail in the event of a conflict of laws.