Can a Mr. Sandless franchisee agree to conduct arbitration outside of their state?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the standard franchise agreement mandates that, at Mr. Sandless's option, all claims or disputes must first be submitted to mediation in Delaware County, Pennsylvania. This mediation would occur under the National Franchise Mediation Program's rules. However, this is explicitly subject to state law, meaning that certain state laws may override this provision.
Specifically, the FDD includes a state-specific addendum for Rhode Island, stating that any franchise agreement provision restricting jurisdiction or venue to a forum outside of Rhode Island, or requiring the application of another state's laws, is void with respect to claims enforceable under the Rhode Island Franchise Investment Act.
For prospective Mr. Sandless franchisees, this means that while the franchise agreement generally specifies Pennsylvania as the location for mediation and litigation, this may not be enforceable depending on the franchisee's state. Franchisees should consult with legal counsel to understand their rights under applicable state laws regarding dispute resolution and choice of forum.