Who bears the costs of arbitration for a Dryer Vent Squad franchise dispute?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
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.
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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 Maryl
Source: Item 23 — RECEIPTS (FDD pages 51–207)
What This Means (2024 FDD)
The 2024 Dryer Vent Squad Franchise Disclosure Document includes several amendments related to dispute resolution, particularly concerning franchisees in specific states like Washington, Illinois, and Maryland. These amendments primarily address the governing laws, venue, and franchisee rights in the context of the Franchise Agreement.
For Washington franchisees, the amendment clarifies that the Washington Franchise Investment Protection Act takes precedence in case of conflicting laws. It also specifies that arbitration or mediation sites for disputes involving franchises purchased in Washington will be located in Washington, unless otherwise agreed upon.
For Illinois franchisees, the amendment states that Illinois law governs the Franchise Agreement, and any provision designating jurisdiction and venue outside of Illinois is void. However, it clarifies that arbitration can still take place outside of Illinois.
For Maryland franchisees, the amendment acknowledges the Maryland Franchise Registration and Disclosure Law. It notes that a Maryland franchise regulation considers it an unfair or deceptive practice to require a franchisee to waive their right to file a lawsuit in Maryland claiming a violation of the Maryland law. The FDD does not specify who bears the costs of arbitration for a Dryer Vent Squad franchise dispute. A prospective franchisee should seek clarification from the franchisor regarding the allocation of arbitration costs.