Who bears the costs of binding arbitration for Mr. Sandless Franchise Agreements?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN | SUMMARY | |
|---|---|---|---|
| FRANCHISE AGREEMENT | |||
| a. Length of the | 3.1 | 10 years | |
| franchise term | |||
| b. Renewal or extension of the term | 3.2 | If you have complied with the Franchise Agreement and certain conditions, you may enter into a successor franchise agreement for the franchise for 2 consecutive additional 5-year terms. | |
| c. Requirements for | 3.2 | You must be in compliance with the Franchise | |
| franchisee to renew or | Agreement; must have satisfied all monetary | ||
| extend | obligations owed to us and our affiliates; must be in | ||
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY | |
| t. Integration/merger clause | 25.1 | Only the terms of the Franchise Agreement are binding (subject to applicable federal and/or state law). Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. | |
| u. Dispute resolution by arbitration or mediation | 24.2, 24.3 | You must bring any dispute or claim to our President first for discussion before you may bring the dispute to a third party. At our option, all claims or disputes relating to the Franchise Agreement must be submitted first to mediation in Delaware County, Pennsylvania under the National Franchise Mediation Program (“NFMP”) in accordance with the NFMP’s mediation rules then in effect.(subject to state law) | |
| v. Choice of forum | 24.6 | Subject to state law, for any dispute not subject to or not resolved by mediation, the parties agree to litigate only in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. | |
| w. Choice of law | 24.1 | Agreement is governed by the laws of Pennsylvania. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)
What This Means (2025 FDD)
Based on the 2025 Mr. Sandless Franchise Disclosure Document, the document does not specify who bears the costs of binding arbitration. However, Item 17 outlines dispute resolution options, stating that franchisees must first bring any dispute to Mr. Sandless's President for discussion before involving a third party. At Mr. Sandless's option, disputes may first be submitted to mediation in Delaware County, Pennsylvania, under the National Franchise Mediation Program. If mediation is unsuccessful, litigation may occur in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania, subject to state law.
Since the FDD does not explicitly state who bears the costs of arbitration, prospective franchisees should seek clarification from Mr. Sandless regarding this matter. Understanding the financial responsibilities associated with dispute resolution is crucial for franchisees to assess the potential costs and risks involved in the franchise agreement. Franchise agreements often include clauses addressing dispute resolution, and the allocation of costs can vary significantly.
It is important for potential Mr. Sandless franchisees to consult with legal counsel to fully understand the implications of the dispute resolution process outlined in the franchise agreement, including the costs associated with mediation, arbitration, and litigation. This will help them make informed decisions and protect their interests throughout the duration of the franchise relationship.