Can Expense Reduction Analysts require arbitration or litigation to be conducted outside of the franchisee's state?

According to the 2025 Expense Reduction Analysts FDD, the ability of Expense Reduction Analysts to require arbitration or litigation outside of a franchisee's state depends on the specific state laws. For instance, in North Dakota, Item 17 (v) of the Disclosure Document and Section 33.4(1) of the Franchise Agreement are amended to state that the site of any mediation or arbitration is agreeable to all parties. Furthermore, any provision in the Franchise Agreement which designates jurisdiction or venue or requires the franchisee to agree to jurisdiction or venue in a forum outside of North Dakota is void with respect to any cause of action which is otherwise enforceable in North Dakota. Similarly, in South Dakota, any provision in a Franchise Agreement which designates jurisdiction or venue or requires the franchisee to agree to jurisdiction or venue outside South Dakota is void with respect to any cause of action which is governed by the law of South Dakota.

However, the standard Franchise Agreement requires litigation for disputes not settled by negotiation or mediation to occur in a state other than Minnesota, with costs being borne equally by both parties. Despite this, Minnesota Statutes § 80C.21 and Minnesota Rule Part 2860.4400J stipulate that this provision cannot invalidate or reduce any of the franchise owner's rights listed in Chapter 80C of the Minnesota Statutes.

In Rhode Island, any litigation or arbitration arising under the Franchise Agreement will take place in Rhode Island or another place mutually agreed to by the franchisee and Expense Reduction Analysts, regardless of what Items 17v and 17w of the Disclosure Document state. Therefore, prospective franchisees should carefully review the addenda specific to their state to understand their rights regarding the location of litigation or arbitration.