What rules govern the binding arbitration of commercial disputes for Deer Solution?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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- 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.
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- Article 18.G. of the Franchise Agreement, under the heading "Choice of Law, Non-Binding Mediation, Binding Arbitration, and Consent to Jurisdiction," shall be amended by the addition of the following statement added to Article 18.G. of the Franchise Agreement:
- A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
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- Article 18.I. of the Franchise Agreement, under the heading "Limitations of Claims," shall be amended by the addition of the following statement added to Article 18.I. of the Franchise Agreement:
Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
A general release required as a condition of renewal, sale and/or assignment or transfer of a Franchise Agreement shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to the 2025 Deer Solution Franchise Disclosure Document, the rules governing binding arbitration for commercial disputes vary based on the franchisee's location, particularly in Illinois and Maryland. For Illinois franchisees, any provision in the Franchise Agreement that designates jurisdiction and venue outside of Illinois is void. However, the agreement may still allow arbitration to occur outside of Illinois. This means that while Deer Solution can require arbitration, it cannot force Illinois franchisees to litigate or arbitrate disputes in another state. This protects the franchisee from having to travel to a distant location to resolve disputes.
For Maryland franchisees, the Franchise Agreement stipulates that disputes are resolved through arbitration. However, Maryland franchise regulations state 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. The FDD acknowledges a dispute about whether the forum selection requirement is legally enforceable, considering the Federal Arbitration Act. To address this, the Maryland amendment explicitly allows a franchisee to bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, regardless of the arbitration clause.
Additionally, any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise. The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law. These stipulations ensure that Maryland franchisees retain their rights under state law and are not unduly restricted by the arbitration clause in the standard Franchise Agreement. Deer Solution franchisees should consult with a legal professional to fully understand their rights and obligations regarding dispute resolution, particularly in light of these state-specific amendments.