Are the dispute resolution provisions in the Cool Binz Franchise Agreement subject to state law?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| with any of your customers or former customers, within: (i) the Territory; (ii) the Territories of any COOL BINZ franchisees, COOL BINZ Company Store, or any other COOL BINZ business operator; or (iii) a radius of 50 miles from the Territory. This provision is subject to state law. | |||
| s. | Modification of Agreement | Section 15.J | Modification of the Franchise Agreement must be in writing and agreed upon by both parties. |
| t. | Integration/me rger clause | Section 15.L | Only the terms of the Franchise Agreement are binding (subject to state law). Any representations or promises outside of the Disclosure Document and Franchise Agreement may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. |
| u. | Dispute resolution by arbitration | Sections 15.F.1 and 15.F.2 | You must bring any disputes arising out of the Franchise Agreement or any other agreement with us to our President prior to bringing a claim before any third party in an attempt to resolve the dispute internally. After exhaustion of this internal dispute resolution procedure, all claims or disputes between you and us must be submitted to binding arbitration in Ann Arbor, Michigan, in accordance with the American Arbitration Association's Commercial Arbitration Rules then in effect. This provision is subject to state law. |
| v. | Choice of forum | Section 15.F.3 | All claims not subject to arbitration must be commenced in the state, or federal court of general jurisdiction in Washtenaw County, Michigan or the United States District Court for the Eastern District of Michigan (subject to applicable state law). |
| w. | Choice of law | Section 15.H | Except federal law, Michigan law applies (sub |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–58)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, the dispute resolution provisions within the Franchise Agreement are subject to state law. Specifically, Item 17 outlines that franchisees must first attempt to resolve disputes internally with Cool Binz's President before pursuing any third-party claims. If this internal process fails, disputes must then be submitted to binding arbitration in Ann Arbor, Michigan, following the American Arbitration Association’s Commercial Arbitration Rules. This arbitration provision, along with the choice of forum and choice of law, is explicitly stated to be subject to applicable state law.
This means that while the Cool Binz agreement specifies arbitration as the primary method for resolving disputes and designates Michigan law as governing, state laws may override or modify these provisions. For example, some states have franchise-specific laws that protect franchisees' rights in dispute resolution, such as mandating mediation before arbitration or limiting the enforceability of certain arbitration clauses. These state laws would take precedence over the standard terms outlined in the Cool Binz Franchise Agreement.
For a prospective Cool Binz franchisee, this has significant implications. It is crucial to understand the franchise laws in their specific state and how they might affect the dispute resolution process. While the agreement mandates arbitration in Michigan, a franchisee's state law could provide additional protections or avenues for resolving disputes. Therefore, consulting with a legal professional familiar with franchise law in their state is essential to fully understand their rights and obligations under the Cool Binz Franchise Agreement.