What governs dispute resolution by arbitration or mediation related to a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 17 Additional Disclosures. The following statements are added to Item 17:
Illinois law governs the agreements.
In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
Any provision requiring franchisees to consent to the jurisdiction of courts outside North Dakota or to consent to the application of laws of a state other than North Dakota may be unenforceable under North Dakota law. Any mediation or arbitration will be held at a site agreeable to all parties. If the laws of a state other than North Dakota govern, to the extent that such law conflicts with North Dakota law, North Dakota law will control.
Both parties waive any objection to the jurisdiction of these courts or to venue in the state and federal courts of Colorado.
Notwithstanding the foregoing, if the laws of the state where the Associate resides prohibit the aforesaid designation of jurisdiction and venue, then such other state's laws shall control.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the governing rules for dispute resolution through arbitration or mediation can vary depending on the franchisee's location. For instance, the standard franchise agreement specifies that jurisdiction and venue for legal actions are in the state and federal courts of Colorado. However, this is superseded if the franchisee's state of residence prohibits such a designation, in which case that state's laws will govern.
For franchisees in Illinois, the FDD states that Illinois law governs the agreements. While the franchise agreement may allow for arbitration to occur outside of Illinois, any provision designating jurisdiction and venue outside of Illinois is void. Similarly, for franchisees in North Dakota, any requirement to consent to the jurisdiction of courts outside North Dakota or to the application of laws of a state other than North Dakota may be unenforceable. In North Dakota, any mediation or arbitration will be held at a site agreeable to all parties, and if another state's laws conflict with North Dakota law, North Dakota law will take precedence.
These stipulations highlight the importance of state-specific addenda in the Floyds 99 FDD. Prospective franchisees should carefully review the addendum for their state to understand how dispute resolution, including arbitration and mediation, is governed in their specific jurisdiction. This ensures that franchisees are aware of their rights and obligations regarding legal recourse and dispute resolution processes.