Does the Coffee News franchise agreement allow either party to bring legal action?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
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, both Coffee News and the franchisee can pursue legal action under specific circumstances. Generally, the agreement mandates arbitration for resolving disputes. However, an exception exists, allowing either party to seek injunctive relief in court to prevent actions that could cause irreparable harm. This means that if Coffee News or the franchisee believes the other party is engaging in conduct that would cause significant and irreversible damage, they can immediately seek a court order to stop the harmful behavior.
Specifically, the Franchise Agreement states that all controversies, disputes, or claims arising under the Agreement between Coffee News and the Franchisee shall be submitted for arbitration to the Office of the American Arbitration Association nearest to Franchisor on demand of either Coffee News or Franchisee. Such arbitration proceedings shall be conducted in Bangor, Maine. The administrative cost of the arbitration, including the cost of the arbitrator, shall be borne equally by the parties, and each party shall be responsible for the payment of its own attorneys' fees and expenses.
This arbitration clause is fairly standard in franchise agreements, as it offers a potentially faster and less expensive way to resolve conflicts compared to traditional litigation. However, the ability to seek injunctive relief provides an important safeguard for both Coffee News and the franchisee, allowing them to protect their interests when urgent action is needed to prevent irreparable harm. Franchisees should understand the types of situations that might warrant injunctive relief and be prepared to act quickly if such a situation arises.