Does the Chocolate Fish Coffee franchise agreement limit litigation brought for breach of the agreement?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
17.3 Waiver of Class Actions. The parties agree that any claims will be arbitrated, litigated, or otherwise resolved on an individual basis, and waive any right to act on a class-wide basis.
17.4 Time Limitation. Any arbitration or other legal action arising from or related to this Agreement must be instituted within two years from the date such party discovers the conduct or event that forms the basis of the arbitration or other legal action.
The foregoing time limit does not apply to claims (i) by one party related to non-payment under this Agreement by the other party, (ii) for indemnity under Article 16, or (iii) related to unauthorized use of Confidential Information or the Marks.
- 17.5 Venue Other Than Arbitration. For any legal proceeding not required to be submitted to arbitration, the parties agree that any such legal proceeding will be brought in the United States District Court where Chocolate Fish Franchising's headquarters is then located.
If there is no federal jurisdiction over the dispute, the parties agree that any such legal proceeding will be brought in the court of record of the state and county where Chocolate Fish Franchising's headquarters is then located.
Each party consents to the jurisdiction of such courts and waives any objection that it, he or she may have to the laying of venue of any proceeding in any of these courts.
- 17.6 Legal Costs. In any legal proceeding (including arbitration) related to this Agreement or any guaranty, the non-prevailing party shall pay the prevailing party's attorney fees, costs and other expenses of the legal proceeding. "Prevailing party" means the party, if any, which prevailed upon the central litigated issues and obtained substantial relief.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, the franchise agreement includes provisions that limit the ability to bring certain types of legal actions. Specifically, franchisees waive the right to participate in class action lawsuits against Chocolate Fish Coffee, meaning any claims must be pursued individually.
Additionally, the agreement imposes a time limitation on legal actions. Any arbitration or legal action related to the agreement must be initiated within two years from the date the party discovers the conduct or event that forms the basis of the claim. However, this time limit does not apply to claims related to non-payment, indemnity, or unauthorized use of confidential information or the Chocolate Fish Coffee trademarks.
For legal proceedings not required to be submitted to arbitration, the agreement specifies that such proceedings must be brought in the United States District Court where Chocolate Fish Coffee's headquarters is located. If there is no federal jurisdiction, the proceedings will be brought in the court of record of the state and county where Chocolate Fish Coffee's headquarters is located. The agreement also stipulates that the non-prevailing party in any legal proceeding related to the agreement will be responsible for paying the prevailing party's attorney fees, costs, and other expenses.