For Deer Solution, what law governs all matters relating to arbitration?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
Illinois law governs the Franchise Agreement.
In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a Franchise Agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a Franchise Agreement may provide for arbitration to take place outside of Illinois.
The Franchise Agreement provides that disputes are resolved through arbitration. A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable.
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.
Nothing in this Agreement should be considered a waiver of any right conferred upon franchisee by New York General Business Law, Sections 680-695.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to the 2025 Deer Solution Franchise Disclosure Document, the specific laws governing arbitration depend on the franchisee's location. For instance, the Illinois Franchise Agreement Amendment states that while Illinois law governs the Franchise Agreement, it allows for arbitration to occur outside of Illinois. The Maryland Franchise Agreement Amendment acknowledges disputes are resolved through arbitration, but also notes a Maryland franchise regulation that aims to protect a franchisee's right to file a lawsuit in Maryland for violations of the Maryland Franchise Law, potentially conflicting with the Federal Arbitration Act.
In Washington, the Washington State Franchise Agreement Amendment indicates that in any arbitration or mediation involving a franchise purchased in Washington, the site will be either in Washington or a place mutually agreed upon. This suggests that Washington franchisees have some protection regarding the location of arbitration proceedings. The New York Franchise Agreement Amendment does not directly address arbitration law but ensures that no provision in the agreement should be considered a waiver of any right conferred upon the franchisee by New York General Business Law, Sections 680-695.
For prospective Deer Solution franchisees, this means that the enforceability and specifics of arbitration clauses can vary significantly based on the state where the franchise is located. Franchisees should be aware of their state's franchise laws and how they interact with the franchise agreement's arbitration provisions. It would be prudent for potential franchisees to seek legal counsel to understand their rights and obligations regarding arbitration in their specific state.