Does the Coffee News agreement favor one party over the other in its construction?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
the time period or specify geographical area of applicability in this agreement, the parties do not intend that a court be able to modify the payment terms set forth herein.
- Arbitration. Except for obtaining injunctive relief by either party against actual or threatened conduct that would cause irreparable harm to that party, all controversies, disputes or claims arising under this Agreement between Franchisor and Franchisee shall be submitted for arbitration to the Office of the American Arbitration Association nearest to Franchisor on demand of either Franchisor or Franchisee. Such arbitration proceedings shall be conducted in Bangor, Maine. Except as otherwise provided in this Agreement, such claims shall be heard by one arbitrator in accordance with the then Current Commercial Arbitration Rules of the American Arbitration The administrative cost of the arbitration, including the cost of the Association. arbitrator, shall be borne equally by the parties. Each party shall be responsible for the payment of its own attorneys' fees and expenses. At Franchisor's request, the arbitrator shall require Franchisee to produce all books and records of the Franchisee's business for Franchisor's examination and use as evidence in the arbitration. The arbitrator shall have the authority to award all relief at law or equity but shall not have the authority to award exemplary or punitive damages. The award and decision of the arbitrator shall be conclusive and binding upon the parties and judgment upon the award may be entered in any court of competent jurisdiction identified in paragraph 16.2 above, including an order pursuant to an opinion of the arbitrator for specific performance of any of the requirements of this Agreement. Franchisor and Franchisee agree that any contest of such award shall be in the courts specified in Paragraph 16.2 above. The arbitrator shall not add, delete, modify or amend any of the terms of this Agreement. This Agreement to arbitrate shall continue in full force and effect subsequent to and not withstanding the expiration or termination of this Agreement. During the period of any dispute or arbitration, the terms of this Agreement will remain in full force and effect on all parties, including the payment of all fees due in accordance with Schedule A and including the use of the trademark by the Franchisee.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
Based on the 2025 Coffee News Franchise Disclosure Document, several clauses address potential imbalances or disputes, but it's not clear if the agreement favors one party.
Regarding dispute resolution, the agreement stipulates that controversies (excluding those requiring injunctive relief for irreparable harm) will be submitted for arbitration to the American Arbitration Association office nearest the franchisor, in Bangor, Maine. The administrative costs of arbitration, including the arbitrator's cost, are to be shared equally between Coffee News and the franchisee, while each party is responsible for their own attorney's fees and expenses. This suggests an attempt at a balanced approach to resolving disputes, although the location of arbitration in Bangor, Maine, could present a logistical or financial disadvantage for franchisees located further away.
Additionally, the agreement addresses the enforceability of restrictive covenants, stating that if any portion is deemed unreasonable or against public policy, it should be considered divisible as to time and region. The document also states that the parties do not intend for a court to be able to modify the payment terms set forth in the agreement. This suggests a willingness to ensure the restrictive covenants are fair and reasonable, while protecting the payment terms for Coffee News.
Prospective franchisees should carefully consider these clauses and seek legal counsel to fully understand their rights and obligations under the Coffee News franchise agreement.