Can Monicals Pizza require arbitration or litigation to be conducted outside of Michigan?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor or Franchisee is required to enforce this Agreement in a judicial or arbitration proceeding, the prevailing party shall be entitled to reimbursement of its costs, including reasonable accounting and attorneys' fees, in connection with such proceeding. Any amounts due from Franchisee to Franchisor shall accrue interest at a rate equal to eighteen percent (18%) per annum, or the maximum rate allowed by applicable law, from the date such payment is due until it is paid in full.
Franchisee acknowledges that any breach by Franchisee of any of the restrictions contained in Sections 6, 7 and 17 would result in irreparable injury to Franchisor, and that the damages arising out of any such breach would be difficult to ascertain, therefore, in addition to all other remedies provided by law or in equity, Franchisor shall be entitled to all equitable remedies, including injunctive relief (whether a restraining order, a preliminary injunction or a permanent injunction) against without requirement to post bond, with respect to any such breach, whether actual or contemplated, and Franchisee specifically waives any and all defenses to injunctive relief and Franchisee shall be responsible for Franchisor's reasonable attorneys' fees incurred in pursuing the same. Franchisor's right to seek injunctive relief shall take precedence over the covenant to arbitrate all disputes in accordance with Section 23.7. Franchisor's rights herein shall include pursuing injunctive relief through arbitration or in a state or federal court.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
Based on the 2025 Monicals Pizza Franchise Disclosure Document, the excerpts provided do not specify whether Monicals Pizza can require arbitration or litigation to be conducted outside of Michigan. The document does outline costs associated with enforcement or defense, stating that the prevailing party in a judicial or arbitration proceeding is entitled to reimbursement of costs, including accounting and attorneys' fees. It also mentions that amounts due to Monicals Pizza from a franchisee will accrue interest at a rate of 18% per annum, or the maximum rate allowed by law.
While the FDD excerpts detail the process for notifications and addresses for sending these notifications, it does not specify the venue for legal proceedings. The FDD also discusses injunctive relief for breaches of certain sections of the agreement, such as those related to trade secrets or non-competition, and states that Monicals Pizza's right to seek injunctive relief takes precedence over the covenant to arbitrate all disputes.
To determine whether Monicals Pizza can mandate that arbitration or litigation occur outside of Michigan, a prospective franchisee should review the complete franchise agreement and any state-specific addenda. It would be prudent to consult with a legal professional to fully understand the implications of the venue selection clause and how it might affect their rights as a franchisee, especially considering the potential costs of enforcement or defense as outlined in the FDD.