Does the Coffee News agreement specify that the venue of legal actions shall be appropriate in Maine courts?
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.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, legal actions are generally required to be conducted in Bangor, Maine. Specifically, any controversies, disputes, or claims arising under the Franchise Agreement between Coffee News and the franchisee must be submitted for arbitration to the American Arbitration Association office nearest to the franchisor. This arbitration proceeding must be conducted in Bangor, Maine. This requirement does not apply when either party seeks injunctive relief against conduct that would cause irreparable harm, allowing them to pursue such relief through other legal avenues.
This arbitration clause means that franchisees may be required to travel to Bangor, Maine, to resolve disputes with Coffee News. Franchisees will be responsible for their own attorney's fees and expenses, while the administrative costs of the arbitration, including the arbitrator's fees, will be shared equally between the franchisee and Coffee News. This arrangement is typical in franchising, where franchisors often specify a preferred venue for dispute resolution to ensure consistency and manage legal costs.
However, it's important to note that the Promissory Note associated with the franchise agreement specifies that it shall be governed by and construed according to the laws of the State of Maine. This suggests that while arbitration is specified for disputes under the Franchise Agreement, other legal proceedings, such as those related to the Promissory Note, may also be subject to Maine law. Franchisees should consult with legal counsel to fully understand the implications of these provisions and how they may affect their rights and obligations.