For Fat Shack, what does 'proper venue' mean in the context of legal proceedings within a state?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Therefore, if a claim is asserted in any legal proceeding not subject to mandatory arbitration, as specified in Section 22.1, involving Franchisee, and the Franchisee Affiliates, on the one side, and FSI and 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.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the 'proper venue' for legal proceedings not subject to mandatory arbitration depends on who is bringing the claim. If a franchisee or their affiliates are bringing a claim against Fat Shack or its affiliates, the exclusive venue is the state and federal courts of Colorado. Both parties waive any objections to personal jurisdiction or venue in those courts. This means a franchisee would likely have to travel to Colorado to pursue legal action against the franchisor.
However, if Fat Shack or its affiliates bring a legal proceeding not subject to mandatory arbitration, they can do so in any court of competent jurisdiction. This includes courts in the country, state, province, or other geographic area where the Fat Shack restaurant is located, or where the franchisee or their affiliates reside or own assets. This provides Fat Shack with more flexibility in choosing a venue that may be more convenient or advantageous for them.
For prospective Fat Shack franchisees, this venue selection clause is important. It means that while they may have to litigate in Colorado if they sue Fat Shack, Fat Shack can potentially sue them in their home state. Franchisees should consider the potential costs and inconvenience of traveling to Colorado for legal proceedings. This clause highlights the importance of carefully reviewing the franchise agreement and understanding the legal obligations and potential risks involved.