What is the required action if a dispute arises between the parties of the Gokhale Method agreement?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
Such arbitration shall take place before a sole arbitrator in Palo Alto, California.
The parties shall bear all of their own costs of arbitration; provided, however, the fees of the arbitrator shall be divided equally between the parties.
The parties hereto agree that arbitration shall not be required, and the parties may proceed in court, with respect to any claim or dispute involving: (a) any payment obligation of yours that is more than forty five (45) days past due; (b) actual or threatened disclosure or misuse of our Confidential Information; (c) the ownership, validity, or use of the Marks; and the Intellectual Property (d) enforcement the covenants set forth in Section 17 of this Agreement.
- 24.4. Exclusive Jurisdiction. You agree that any legal action not subject to arbitration shall be brought only in the state or federal courts for Palo Alto, California and in no other venue.
You agree that service of process for purposes of any such action may be made by certified mail addressed to you at the address set forth herein.
- 24.5. Limitation of Claims.
Except for claims arising from your nonpayment or underpayment of amounts you owe us pursuant to this Agreement or claims related to your unauthorized use of the Marks, any and all claims arising out of or relating to this Agreement or our relationship with you will be barred unless a demand for mediation, or arbitration or a judicial proceeding is commenced within one (1) year from the date on which the party asserting such claim knew or should have known of the facts giving rise to such claims.
- You agree that any claim or action not brought within the period required under this Section 24.5 shall forever be barred as a claim, counterclaim, defense, or set off.
In no case shall recovery of claims against us exceed the aggregate of sums received by us from you.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, disputes between the franchisor and franchisee are generally subject to arbitration, which will take place before a single arbitrator in Palo Alto, California. Both parties are responsible for their own arbitration costs, but they will divide the arbitrator's fees equally.
However, there are exceptions to this arbitration requirement. Gokhale Method is not required to engage in arbitration, and may proceed in court, for claims or disputes involving the franchisee's payment obligations that are more than 45 days past due, actual or threatened disclosure or misuse of Gokhale Method's confidential information, issues related to the ownership, validity, or use of the Marks and Intellectual Property, and enforcement of the covenants outlined in Section 17 of the agreement. Any legal action not subject to arbitration must be brought in the state or federal courts for Palo Alto, California.
Furthermore, any claims arising from the franchise agreement or the relationship between Gokhale Method and the franchisee, with the exception of claims related to nonpayment or unauthorized use of the Marks, will be barred unless a demand for mediation, arbitration, or a judicial proceeding is initiated within one year from the date the party knew or should have known about the facts giving rise to the claim. The document also stipulates that in no case shall recovery of claims against Gokhale Method exceed the aggregate of sums received by them from the franchisee.