Does the Checkersrallys franchise agreement require arbitration or litigation to be conducted outside of the franchisee's state?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
cision of the arbitrators shall be conclusive and binding on all parties, and judgment upon the award may be entered in any court of competent jurisdiction. Any right to contest the validity or enforceability of the award shall be governed exclusively by the United States Arbitration Act. We reserve the right, but have no obligation, to advance your share of the costs, fees and expenses of any arbitration proceeding, including any arbitrator fees, in order for such arbitration proceeding to take place, and by doing so will not be deemed to have waived or relinquished our right to seek the recovery of those amounts from the arbitrators, who shall provide for such relief in the final award, in addition to the costs, fees, and expenses that are recoverable under Section 10.04 above. The provisions of this Section 10.06 shall continue in full force and effect subsequent to and notwithstanding expiration or termination of this Agreement.
10.07 Jurisdiction and Venue. SUBJECT TO SECTION 10.06 ABOVE AND THE PROVISIONS BELOW, YOU AND YOUR OWNERS IRREVOCABLY AGREE THAT: (A) ALL ACTIONS ARISING UNDER THIS AGREEMENT OR OTHERWISE AS A RESULT OF THE RELATIONSHIP BETWEEN FRANCHISEE AND FRANCHISOR MUST BE COMMENCED IN THE STATE OR FEDERAL COURT OF GENERAL JURISDICTION LOCATED CLOSEST TO OUR THEN CURRENT CORPORATE HEADQUARTERS (CURRENTLY TAMPA, FLORIDA); AND (B) ANY SUCH MATTER SHALL BE TRIED BY AND TO THE COURT SITTING WITHOUT A JURY, AND YOU WAIVE ANY RIGHT TO A JURY TRIAL. YOU IRREVOCABLY WAIVE, TO THE FULLEST EXTENT YOU MAY LAWFULLY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT, ACTION OR PROCEEDING, AND AGREE THAT SERVICE OF PROCESS FOR PURPOSES OF ANY SUCH SUIT, ACTION OR PROCEEDING NEED NOT BE PERSONALLY SERVED OR SERVED WITHIN THE STATE OF FLORIDA, BUT MAY BE SERVED WITH THE SAME EFFECT AS IF YOU WERE SERVED WITHIN THE STATE OF FLORIDA, BY CERTIFIED MAIL OR ANY OTHER MEANS PERMITTED BY LAW ADDRESSED TO YOU AT THE ADDRESS SET FORTH HEREIN. NONETHELESS, YOU AND YOUR OWNERS AGREE THAT WE MAY ENFORCE THIS AGREEMENT AND ANY ARBITRATION ORDERS AND AWARDS IN THE COURTS OF THE STATE OR STATES IN WHICH YOU ARE DOMICILED OR THE DEVELOPER BUSINESS IS LOCATED.
10.08 Governing Law.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the franchise agreement generally requires that all actions be commenced in the state or federal court closest to Checkersrallys's corporate headquarters, which is currently in Tampa, Florida. Franchisees also waive any right to a jury trial. However, Checkersrallys can enforce the agreement and any arbitration orders in the courts of the state where the franchisee is domiciled or where the business is located. This means that while initial actions may need to be filed in Florida, Checkersrallys retains the right to pursue enforcement in the franchisee's home state.
For franchisees in Illinois, any provision in the franchise agreement that designates jurisdiction or venue in a forum outside the State of Illinois is void, although arbitration may occur outside of Illinois. Similarly, in Maryland, any clause referencing choice of forum is not applicable to claims arising under the Maryland Franchise Registration and Disclosure Law. In Minnesota, the FDD states that nothing in the document or agreement can abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
For prospective franchisees, this means that the location of litigation or arbitration may depend on the state where the franchise is located, due to variations in state franchise laws. Franchisees should be aware of the specific laws in their state and how they interact with the franchise agreement. It is advisable to seek legal counsel to understand the full implications of these clauses, especially concerning dispute resolution and governing law, as these can significantly impact a franchisee's rights and obligations.