According to the Cream franchise agreement, where must all legal actions be commenced?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the obligation to arbitrate under 17.G above and the provisions below, you and your owners agree that all actions arising under this Agreement or otherwise as a result of the relationship between you and us must be commenced in the court nearest to our or, as applicable, our successor's or assign's then-current principal place of business (currently, Columbus, Ohio), and you (and each owner) irrevocably submit to the jurisdiction of that court and waive any objection you (or the owner) might have to either the jurisdiction of or venue in that court.
I. WAIVER OF PUNITIVE DAMAGES AND JURY TRIAL.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, any legal actions arising from the Cream franchise agreement or the relationship between the franchisee and Cream must be initiated in the court nearest to Cream's principal place of business, which is currently in Columbus, Ohio. The franchisee and their owners irrevocably submit to the jurisdiction of that court and waive any objections to the jurisdiction or venue. This requirement is subject to the obligation to arbitrate, as detailed in another section of the agreement.
This clause centralizes legal proceedings in Cream's home jurisdiction, which is common in franchising. This can be advantageous for Cream, as it is familiar with the local legal environment. However, it may present a disadvantage for franchisees who do not reside in Ohio, as they may incur additional travel and legal expenses to defend themselves in court.
It's important to note that this requirement is subject to the arbitration agreement, meaning that some disputes may be resolved through arbitration rather than court proceedings. Franchisees should carefully review the arbitration clause to understand the scope and limitations of this alternative dispute resolution process. Franchisees should also be aware that they are waiving their right to a jury trial and punitive damages.