Where must arbitration be submitted for Creative Colors disputes?
Creative_Colors Franchise · 2025 FDDAnswer from 2025 FDD Document
in your relationship with the franchisor including the areas of termination and renewal of your franchise. There may also be court decisions which may supersede the franchise agreement in your relationship with the franchisor, including the areas of termination and renewal of your franchise.
In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
Source: Item 23 — RECEIPT (FDD pages 69–217)
What This Means (2025 FDD)
According to Creative Colors' 2025 Franchise Disclosure Document, the location for arbitration depends on the franchisee's location. For franchisees who purchase a franchise in Washington, the arbitration site will be in Washington, or a location mutually agreed upon, or as determined by the arbitrator or mediator. However, Item 17 is amended for California franchisees, stating that arbitration will occur in Chicago, Illinois, with the cost being shared by Creative Colors and the franchisee. The FDD also states that this provision may not be enforceable under California law.
This means that prospective Creative Colors franchisees should pay close attention to the addenda specific to their state, as these can modify the standard franchise agreement. The location of arbitration can significantly impact the cost and convenience of resolving disputes. Franchisees in Washington have some flexibility in determining the arbitration site, while California franchisees are initially bound to Chicago, though this may not be enforceable.
It is important for potential franchisees to seek legal counsel to understand the implications of these arbitration clauses in their specific state. Arbitration clauses can affect a franchisee's rights and ability to pursue legal action against Creative Colors. Consulting with an attorney can help franchisees make informed decisions about entering into a franchise agreement and understand their rights in case of a dispute.