Does the Crab N Spice Rider allow for arbitration of claims?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
In any arbitration involving a franchise purchased in Washington, the arbitration site shall be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration, or as determined by the arbitrator.
| This Rider amends the Agreement "Agreement"), between Crab N Spice Group, a California corporation ("CNS Franchising") and , a ("Franchisee"). | dated (the |
|---|---|
| 2. | |
| Governing Law and Jurisdiction. Notwithstanding any provision of the Agreement to | |
| the contrary, the Agreement is governed by Illinois law. The parties irrevocably submit to the | |
| jurisdiction and venue of the federal and state courts in Illinois, except for matters which the | |
| Agreement provides will be resolved by arbitration. | |
| 4. | |
| Waivers Void. Notwithstanding any provision of the Agreement to the contrary, any | |
| condition, stipulation, or provision purporting to bind Franchisee to waive compliance with any | |
| provision of the Illinois Act or any other law of the State of Illinois is void. This Section shall not | |
| prevent Franchisee from entering into a settlement agreement or executing a general release | |
| regarding a potential or actual lawsuit filed under any of the provisions of this Act, nor shall it | |
| prevent the arbitration of any claim pursuant to the provisions of Title 9 of the United States Code. |
| | (2) | Situs of Arbitration Proceedings: Franchisee and any Guarantor are not required to | | | | agree to the arbitration of disputes at a location that is remote from the site of | | | | Franchisee's business.
Source: Item 22 — CONTRACTS (FDD pages 50–51)
What This Means (2024 FDD)
According to the 2024 Crab N Spice Franchise Disclosure Document, the Washington Addendum to Disclosure Document and Rider to Franchise Agreement addresses arbitration. Specifically, for franchises purchased in Washington, the arbitration site must be in Washington state or a location mutually agreed upon at the time of arbitration, or as determined by the arbitrator. This indicates that arbitration is a possibility, but the location may be subject to certain conditions.
Additionally, the Illinois Rider to Franchise Agreement provides that the parties irrevocably submit to the jurisdiction and venue of the federal and state courts in Illinois, except for matters which the Agreement provides will be resolved by arbitration. The Illinois Rider also states that nothing shall prevent the arbitration of any claim pursuant to the provisions of Title 9 of the United States Code.
Furthermore, the North Dakota Rider to Franchise Agreement states that Franchisee and any Guarantor are not required to agree to the arbitration of disputes at a location that is remote from the site of Franchisee's business. This suggests that while arbitration may be possible, franchisees in North Dakota have some protection regarding the location of such proceedings. These stipulations are important for prospective franchisees to consider, as they highlight the circumstances under which arbitration may be required or restricted, depending on the state where the franchise is located.