Where must disputes with Golden Krust Caribbean Restaurant be arbitrated?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
| PROVISION | SECTION IN FRANCHISE | SUMMARY | |
|---|---|---|---|
| AGREEMENT | |||
| (q) Non-competition | Section VII | No controlling ownership interest in, or | |
| covenants during the | perform services for, competitive business | ||
| term of the franchise | anywhere. | ||
| (r) Non-competition covenants after the franchise is terminated or expires | Section XVI.D. | No interest in competing business for 2 years at, or within 10 miles of premises of Restaurant or within 5 miles of any other Golden Krust Restaurant that is in operation or under construction (same restrictions apply after assignment) | |
| (s) Modification of the agreement | Section XVIII.G. | No modifications generally but Brand Standards Manual and System Standards are subject to change. | |
| (t) Integration/Merger clause | Section XVIII.H. | Only the terms of the Franchise Agreement (including the Brand Standards Manual) are binding. Any other promises may not be enforceable. Nothing in the Franchise Agreement or in any related agreement is intended to disclaim our representations made in the Franchise Disclosure Document | |
| (u) Dispute resolution by | Section XVIII.E. | Except for certain claims, all disputes must be | |
| arbitration or | arbitrated in White Plains, New York (subject | ||
| mediation | to state law) | ||
| (v) Choice of forum | Section XVIII.F. | Arbitration shall be in New York (subject to state law). | |
| (w) Choice of law | Section XVIII.F. | New York law applies (subject to state law) |
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 29–32)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, dispute resolution through arbitration is specified. Except for certain claims, all disputes must be arbitrated in White Plains, New York, although this is subject to state law. Furthermore, the choice of forum for arbitration is also New York, again subject to state law. This means that if a franchisee has a dispute with Golden Krust Caribbean Restaurant that cannot be resolved through other means, the arbitration proceedings will take place in White Plains, New York, and will be governed by New York law, unless state law dictates otherwise.
This requirement to arbitrate in New York could present logistical and financial challenges for franchisees located outside of New York. Franchisees would need to factor in travel costs, legal representation in New York, and the potential inconvenience of being away from their business during the arbitration process. It is important for prospective franchisees to understand the implications of this clause and consider whether it could create a disadvantage for them in the event of a dispute.
It is also worth noting that the FDD mentions exceptions to this arbitration requirement for certain claims, but it does not specify what those claims are. A prospective franchisee should seek clarification from Golden Krust Caribbean Restaurant regarding the types of claims that are not subject to arbitration and what alternative dispute resolution methods would apply in those cases. Understanding these exceptions is crucial for making an informed decision about investing in a Golden Krust Caribbean Restaurant franchise.