Where will arbitration occur for Face Foundrie disputes?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section(s) in | Summary | |
|---|---|---|---|
| (u) Dispute resolution by | Sections 16.3 and 16.4 | Except for certain claims, all disputes must be | |
| arbitration or | mediated, and if not settled by mediation, are then | ||
| mediation | subject to arbitration. | ||
| (v) Choice of forum | Section 16.5 | Litigation must be held in the federal or state court for the district where our principal executive office is located (subject to state law). Mediation must occur in a metropolitan area within 20 miles of our principal executive office and arbitration must occur in the office of the American Arbitration Association closest to our principal executive office. | |
| (w) Choice of law | Section 16.1 | Minnesota law applies generally, provided that the Minnesota Franchise Act and other franchise- specific laws and regulations of the State of Minnesota generally do not apply to Facial Bars located outside of Minnesota. (Subject to applicable state law.) |
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, dispute resolution involves mediation and arbitration. Except for certain claims, disputes must first undergo mediation. If mediation fails to resolve the issue, arbitration is required. The location for these proceedings is specifically defined. Litigation must be held in the federal or state court for the district where Face Foundrie's principal executive office is located, subject to state law. Mediation must occur in a metropolitan area within 20 miles of Face Foundrie's principal executive office. Arbitration must occur in the office of the American Arbitration Association closest to Face Foundrie's principal executive office. The choice of law is generally Minnesota law, although the Minnesota Franchise Act typically does not apply to Facial Bars located outside of Minnesota, subject to applicable state law.
For a prospective Face Foundrie franchisee, this means that any legal disputes with the franchisor will likely be resolved through mediation and arbitration before going to court. The mediation will take place near Face Foundrie's headquarters, and arbitration will be handled by the American Arbitration Association office closest to their headquarters. This arrangement could mean added travel and expenses for franchisees who are not located near Face Foundrie's principal executive office. Franchisees should factor in these potential costs when evaluating the franchise opportunity.
It is typical in franchising for the franchisor to specify the venue for dispute resolution, often favoring their home jurisdiction. This clause aims to provide Face Foundrie with a consistent and predictable legal environment. However, franchisees should be aware of the potential implications of this clause, especially if they are located far from Minnesota. They should seek legal counsel to understand their rights and obligations under the franchise agreement and applicable state laws.