Where will arbitration or litigation take place for a Fat Shack franchise?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or | Summary | |
|---|---|---|---|
| Other Agreement | |||
| u. Dispute resolution by | Article 22 of FA; Section 8.1 of | Arbitration or litigation in Denver, Colorado (subject to | |
| arbitration or mediation | DA | state law). | |
| v. Choice of forum | Section 22.5 of FA; Section 8.1 of DA | Arbitration or litigation in Denver, Colorado (subject to state law). | |
| w. Choice of law | Section 22.5 of FA; Section 8.3 of DA | Except for federal law, Colorado law applies (subject to applicable state law). |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 43–46)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, both arbitration and litigation will take place in Denver, Colorado. This is detailed in Item 17, which outlines dispute resolution processes. However, this is subject to applicable state law, meaning that depending on the franchisee's location, state laws could potentially override this clause.
This means that if a dispute arises between a Fat Shack franchisee and the franchisor, the legal proceedings, whether through arbitration or a lawsuit, are contractually set to occur in Denver, Colorado. This could involve travel and associated costs for the franchisee if they are not located in Colorado. It is important to note the FDD indicates that state law may supersede the Franchise Agreement.
The FDD also mentions that certain states have statutes that may supersede the Franchise Agreement in areas like termination and renewal. Franchisees should refer to the State Addenda attached to the FDD to understand how their state's laws might affect the franchise agreement. This is especially important concerning dispute resolution, as state laws can influence the enforceability of the specified forum.
Choice of forum clauses are common in franchise agreements, but franchisees should be aware of the potential implications of having to resolve disputes in a location that may be far from their business. It is advisable to consult with a legal professional to understand the full scope of these provisions and how they interact with local and state laws.