Are Creative World School disputes resolved by state arbitration law?

According to the 2025 Creative World School Franchise Disclosure Document, the franchise agreement requires certain disputes to be submitted to binding arbitration. However, the FDD includes addenda for specific states like Illinois, Maryland, New York, and Virginia, which modify the standard agreement to comply with state-specific franchise laws. These addenda often include provisions that prevent franchisees from waiving rights granted by state franchise laws. For example, Illinois law specifies that any provision designating jurisdiction and venue outside of Illinois is void, although arbitration may still take place outside of the state.

For franchisees in Maryland, the addendum states that general releases required for renewal, sale, or transfer do not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. Additionally, franchisees in Maryland have the right to bring lawsuits against Creative World School in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, and any claims must be brought within 3 years after the grant of the franchise. Similarly, in Virginia and New York, franchisees cannot waive claims under applicable state franchise law.

These state-specific addenda suggest that while Creative World School generally prefers arbitration, the enforceability and interpretation of the arbitration clause, and other dispute resolution mechanisms, are subject to the laws of the state in which the franchise is located. This means that a franchisee's ability to resolve disputes through arbitration, or other means, may be affected by state laws designed to protect franchisees. Prospective franchisees should carefully review the addendum for their specific state and consult with legal counsel to understand their rights and obligations regarding dispute resolution.