Where in the Ledgers FDD can I find information about 'Choice of forum'?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
nd Section 1.2.B of the FA is modified to also provide,
- "The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
- B. Item 17.u. of the FDD and Section 9.2E of the FA is modified to also provide,
- "This Franchise Agreement provides that disputes are resolved through arbitration. A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable."
- C. Item 17.v. of the FDD and Section 9.5A of the FA is modified to also provide,
- "Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise."
- D. Item 5 of the FDD and Section 2.1 of the FA are modified with the addition of the following language:
- "Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. "
- E.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 Ledgers Franchise Disclosure Document, Item 22 contains information regarding 'Choice of forum' specifically for franchisees in Maryland and New York. For Maryland franchisees, Item 17.u of the FDD and Section 9.2E of the Franchise Agreement are modified to acknowledge a potential conflict between the franchise agreement's arbitration clause and Maryland law regarding a franchisee's right to file a lawsuit in Maryland. This modification indicates that the enforceability of the forum selection requirement may be disputed due to the Federal Arbitration Act.
For New York franchisees, Item 22 states that the following is added to the end of the "Summary" sections of Item 17(v), titled "Choice of forum", and Item 17(w), titled "Choice of law": The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York.
Additionally, the FDD advises prospective franchisees in California to seek legal counsel to understand how California and federal laws might affect franchise agreement clauses that restrict venue to locations outside of California. The Franchise Agreement requires application of the laws of Virginia, but this provision may not be enforceable under California law. This suggests that the choice of forum and choice of law provisions can be complex and may be subject to state-specific regulations and legal interpretations, potentially impacting where disputes can be resolved.