Are arbitration issues related to the Fat Shack franchise to be resolved pursuant to any statutes, regulations, or common law other than the United States Federal Arbitration Act?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
The United States Federal Arbitration Act shall govern all questions about the enforceability of Sections 22.1 and 22.2 and the confirmation of any arbitration awards pursuant to such procedures, and no arbitration issues are to be resolved pursuant to any other statutes, regulations or common law. Otherwise, except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et seq.) or other United States federal law, disputes related to a violation of the Indiana Franchises Act or the Indiana Deceptive Franchise Practices Act shall be governed thereby, and all other matters regarding this Agreement shall be interpreted under the laws of the State of Colorado and any dispute between the parties shall be governed by and determined in accordance with the internal substantive laws, and not the laws of conflict, of the State of Colorado, which laws shall prevail in the event of any conflict of law. Notwithstanding the foregoing, the parties agree that the Colorado Consumer Protection Act (COLO. REV. STAT. ANN. Sections 6-1-101, et seq.) shall not apply to this Agreement or any disputes between the parties. Subject to the foregoing, Franchisee and FSI have negotiated regarding a forum in which to resolve any disputes that arise between them and have agreed to select a forum in order to promote stability in their relationship. Therefore, if a claim is asserted in any legal proceeding not subject to mandatory arbitration, as specified in Section 22.1, involving Franchisee and/or the Franchisee Affiliates, on the one side, and FSI and/or the FSI Affiliates, on the other side, both parties agree that the exclusive venue for disputes between them shall be in the state and federal courts of Colorado, and each waive any objection either may have to the personal jurisdiction of or venue in the state and federal courts of Colorado. Notwithstanding the foregoing, any legal proceeding by FSI or any FSI Affiliate not subject to mandatory arbitration may be brought in any court of competent jurisdiction in the country, state, province, or other geographic area in which the FAT SHACK Restaurant is located or in which Franchisee or any Franchisee Affiliate resides or owns assets. IF A CLAIM MAY BE BROUGHT IN COURT, THEN FSI, THE FSI AFFILIATES, FRANCHISEE AND THE FRANCHISEE AFFILIATES EACH WAIVE THEIR RIGHTS TO A TRIAL BY JURY.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the United States Federal Arbitration Act governs all questions regarding the enforceability of arbitration agreements and the confirmation of arbitration awards. The franchise agreement specifies that no arbitration issues are to be resolved under any other statutes, regulations, or common law.
This means that any disputes between Fat Shack and a franchisee that are subject to arbitration will be handled according to the procedures and standards established by the Federal Arbitration Act, which is a common practice in franchising to ensure a consistent and predictable legal framework for resolving disputes.
However, it's important to note that this clause does not prevent other laws from governing the franchise agreement in general. The document states that, unless governed by the United States Trademark Act or other federal law, the laws of the State of Colorado will be used to interpret the agreement and resolve disputes, except for disputes related to a violation of the Indiana Franchises Act or the Indiana Deceptive Franchise Practices Act, which shall be governed thereby. Additionally, the Colorado Consumer Protection Act does not apply to the agreement or any disputes.