During a dispute or arbitration, do the terms of the Coffee News franchise agreement remain in effect?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
remainder of the Agreement shall continue in full force or effect as if the Agreement had been signed with the invalid portion so modified or eliminated.
Notwithstanding that the parties agree that any court of competent jurisdiction may modify 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, if any portion of the agreement is deemed invalid, the remainder of the agreement will remain in full force and effect, as if the agreement had been signed with the invalid portion modified or eliminated. This ensures that even if a specific clause is challenged, the overall franchise relationship and obligations continue.
This provision is important for prospective Coffee News franchisees because it provides clarity and stability during potential disputes. It means that the core terms of the franchise agreement, such as operational standards, payment obligations, and intellectual property rights, remain enforceable unless specifically invalidated. This reduces the risk of the entire agreement being nullified due to a single contested clause.
However, the document also specifies that the parties do not intend for a court to be able to modify the payment terms set forth in the agreement. This indicates that while other terms might be subject to modification or elimination, the financial obligations are intended to remain firm. Franchisees should be aware of this and carefully consider the payment terms before entering into the agreement.
Furthermore, the agreement includes an arbitration clause, stating that all controversies, disputes, or claims arising under the agreement between Coffee News and the franchisee will be submitted for arbitration to the American Arbitration Association, except for actions seeking injunctive relief for conduct causing irreparable harm. This means that most disputes will be resolved through arbitration rather than litigation, which can be a more efficient and cost-effective process. The arbitration proceedings will be conducted in Bangor, Maine, and the administrative costs, including the arbitrator's cost, will be shared equally by both parties, with each party responsible for their own attorney's fees and expenses.