If mediation does not resolve a dispute related to the Gokhale Method franchise, how will it be resolved?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
| m.Conditionsforfranchisorapproval | Section14.2 | We have the right to impose conditions on thetransfertothe |
|---|---|---|
| oftransfer | extentwehavetopermittransferunderstatelaw. | |
| n.Franchisor’srightoffirstrefusalto | None | |
| acquirefranchisee’sbusiness | ||
| o.Franchisor’soptiontopurchase | None | |
| franchisee’sbusiness | ||
| p.Deathorincompetenceof | Section14.2 | The franchise agreement cannot be transferred upondeathor |
| franchisee | incompetence. | |
| q.Non-competitioncovenantsduring thetermofthefranchise | Section17.1 | You cannot: divert or attempt to divert any present or prospective customer; employ or seek to employ any person employed by us, our affiliates, or any of our franchisees; be involvedinanyCompetitiveBusiness. |
| r.Non-competitioncovenantsafter thefranchiseisterminatedorexpires | Section17.2 | You cannot be involved for a period of two (2) years in any business that iscompetitivewithourswithina10-mileradius of your former location or of any location then existing wheretheGokhaleSystemistaught. |
| s.Modificationofagreement | Section22and Section8.10 | No amendments to the franchise agreement may be made unless the agreement allows us to unilaterally change something or unless the change is mutually agreed to by the parties and executed in writing. Also, we may change the Systemfromtimetotime. |
| t.Integration/mergerclause | Section22 | Only the terms of the franchise agreement are binding (subjecttostatelaw). |
| u.Disputeresolutionbyarbitrationor mediation | Section24 | Except for certain claims, all disputes are subject to mediation, and if mediation does not resolve a dispute, it shallberesolvedinarbitrationinPaloAlto,California. |
| v.Choiceofforum | Section24 | Arbitration must be in Palo Alto, California and any claims not subject to arbitration shall be brought only inthestateor federalcourtsforPaloAlto,California. |
| w.Choiceoflaw | Section24 | California law shall apply, except that the California Franchise Relations Act and the California Franchise Investment Law, nor any portions thereof, shall apply unless you satisfy the requirementsforapplicationofsuchlawapart from the choice of law provision. AND EXCEPT THAT LAWS OF STATE IN WHICH YOUR FRANCHISE IS LOCATED SHALL GOVERN WITH RESPECT TO SECTION17ANDITSENFORCEMENT |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 27–29)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, disputes that are not resolved through mediation will be settled through arbitration. The FDD specifies that this arbitration will take place in Palo Alto, California. Furthermore, any claims that are not subject to arbitration must be brought in the state or federal courts located in Palo Alto, California. This means a franchisee may be required to travel to California to resolve legal disputes with Gokhale Method.
The FDD also states that California law governs the franchise agreement, with specific exceptions. The California Franchise Relations Act and the California Franchise Investment Law do not apply unless the franchisee independently meets the requirements for their application, irrespective of the choice of law provision. However, the laws of the state where the franchise is located will govern Section 17 of the agreement and its enforcement.
This dispute resolution process has significant implications for prospective Gokhale Method franchisees. Franchisees should be aware that they may incur travel and legal expenses associated with arbitration or litigation in California. The application of California law, with certain exceptions, could also impact the interpretation and enforcement of the franchise agreement. Franchisees should consult with a legal professional to understand the full scope of these provisions and how they may affect their rights and obligations.