Who bears the costs of arbitration for Checkersrallys Franchise Agreements and Development Agreements?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The Franchise Agreement and Development Agreement require binding arbitration. The arbitration will occur in the State of Florida, with the costs being borne as provided in those Agreements. 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.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the costs of arbitration for Franchise Agreements and Development Agreements are determined by the specific terms outlined within those agreements. Specifically, for California franchisees, Item 23 notes that the arbitration will occur in Florida, with costs borne as provided in the agreements. Prospective franchisees are encouraged to seek legal counsel to determine the applicability of California and federal laws.
This means that prospective Checkersrallys franchisees need to carefully review the Franchise Agreement and Development Agreement, paying close attention to the clauses that address arbitration costs. The agreements dictate how these costs are divided or assigned between the franchisee and franchisor.
Given that the FDD highlights the importance of consulting legal counsel, it is essential for potential franchisees to understand their financial responsibilities regarding arbitration. This includes not only the direct costs of the arbitration process but also any associated legal fees. Understanding these potential costs is crucial for assessing the overall financial risk and viability of investing in a Checkersrallys franchise.