According to the Chatime FDD, in which state must all litigation be brought?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- The Franchise Agreement requires that any action that is brought by you against us be commenced in New York and that you must irrevocably submit to the jurisdiction of such court. This provision may not be enforceable under California law.
In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the State of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.
In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
In conformance with §4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction or venue in a forum outside the State of Illinois is void.
- C. Restrictions on Forum: Requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, the answer to which state all litigation must be brought depends on the state where the franchisee is located. For instance, the FDD states that the Franchise Agreement requires any action brought against Chatime to be commenced in New York, but this provision may not be enforceable under California law.
Furthermore, the FDD includes addenda for specific states that address litigation and dispute resolution. For Washington franchisees, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington. For franchisees in Illinois, any provision in a franchise agreement that designates jurisdiction or venue in a forum outside the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
For North Dakota franchisees, franchise agreements cannot require them to consent to the jurisdiction of courts outside of North Dakota. These state-specific addenda modify the standard franchise agreement to comply with local laws, particularly regarding where legal actions can be initiated. Prospective franchisees should carefully review the addendum for their specific state to understand their rights and obligations regarding litigation.