What is the effect of the consent to jurisdiction provision in the Coffee News agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
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, any arbitration proceedings between the franchisor and franchisee will be conducted in Bangor, Maine. This means that a Coffee News franchisee would likely be required to travel to Bangor, Maine, to participate in arbitration, regardless of where their franchise is located.
This could significantly increase the cost of resolving disputes for franchisees who do not live near Bangor, Maine, as they would need to factor in travel expenses, accommodation, and potentially local legal representation. While the administrative costs of the arbitration are to be shared equally, each party is responsible for their own attorney's fees and expenses, adding to the financial burden.
However, the agreement does allow either party to seek injunctive relief against conduct that could cause irreparable harm without going through arbitration. This exception provides a quicker legal recourse in situations where immediate action is necessary to prevent significant damage. The FDD does not specify what state laws govern the franchise agreement, but it does state that the Schedule B and the Promissory Note contained within it shall be governed by and construed according to the laws of the State of Maine.