Which law governs the arbitration clause in the Focus Cfo agreement?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement evidences a transaction involving commerce and, therefore, the Federal Arbitration Act, Title 9 of the United States Code is applicable to the subject matter contained herein.
Except for controversies or claims relating to the ownership of any and all intellectual property rights, including, but not limited to, Focus CFO's Marks, copyrights or the unauthorized use or disclosure of Focus CFO's
Confidential Information, covenants against competition and other claims for injunctive relief, or amounts owed by Franchisee to Focus CFO, all disputes arising out of or relating to this Agreement or to any other agreements between the parties, or with regard to interpretation, formation or breach of this or any other agreement between the parties, shall be settled by binding arbitration conducted in Franklin County, Ohio, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect.
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to the 2025 Focus Cfo Franchise Disclosure Document, the Federal Arbitration Act governs all matters subject to arbitration within the franchise agreement. This means that any disputes that proceed to arbitration will be subject to the rules and regulations established by this federal law.
This is a standard practice in franchising, as the Federal Arbitration Act is often used to govern arbitration proceedings to ensure consistency and enforceability across state lines. Franchise agreements typically include arbitration clauses to resolve disputes outside of court, offering a potentially faster and more cost-effective resolution process.
However, the Focus Cfo agreement also specifies certain exceptions to this arbitration clause. Controversies or claims relating to the ownership of intellectual property rights (such as Focus Cfo's marks and copyrights), unauthorized use or disclosure of confidential information, covenants against competition, claims for injunctive relief, or amounts owed by the franchisee to Focus Cfo are not subject to arbitration. These types of disputes may be pursued in court. Prospective franchisees should understand these exceptions, as they outline specific situations where litigation may still occur despite the general arbitration requirement.