Can an Extreme Art Studio franchisee in Michigan agree to arbitration outside of Michigan?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
This section does not require a renewal provision.
- (f) A provision requiring that arbitration or litigation be conducted outside the State of Michigan.
This shall not preclude you from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state.
Source: Item 23 — RECEIPTS (FDD pages 49–214)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the franchise agreement cannot initially require arbitration or litigation to be conducted outside of Michigan. However, a franchisee is not precluded from agreeing to conduct arbitration at a location outside of Michigan at the time of arbitration.
This means that while the initial franchise agreement cannot mandate out-of-state arbitration, an Extreme Art Studio franchisee in Michigan can later voluntarily agree to arbitrate disputes in another location if they choose to do so. This provides some flexibility for both the franchisee and franchisor to find a mutually agreeable location for arbitration if a dispute arises.
This type of clause is included to comply with Michigan franchise law, which aims to protect franchisees by ensuring certain rights and protections. The FDD specifies that this provision does not prevent a franchisee from later agreeing to arbitration outside of Michigan, indicating a balance between protecting the franchisee's initial rights and allowing for flexibility in dispute resolution.