If mediation fails for a Mr. Sandless franchise dispute, where must litigation occur?
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. (subject to state law) |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, if a dispute is not resolved through mediation, litigation must occur in specific courts within Delaware County, Pennsylvania. Specifically, the Franchise Agreement dictates that lawsuits can only be filed in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. This clause is subject to state law, meaning that the enforceability of this provision may vary depending on the franchisee's location.
This forum selection clause means that a Mr. Sandless franchisee would likely need to travel to Pennsylvania to resolve legal disputes with the franchisor. This could significantly increase the franchisee's legal costs due to travel, lodging, and potentially hiring local counsel. It also means that the franchisee will be subject to Pennsylvania law, as the agreement is governed by the laws of Pennsylvania.
It is important to note that certain states have laws that may override this clause. For example, the Rhode Island Franchise Investment Act states that any provision restricting jurisdiction or venue to a forum outside of Rhode Island or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under the Act. Similarly, under Indiana law, jurisdiction and venue must be in Indiana if the franchisee so requests. Therefore, prospective franchisees should consult with an attorney to understand how these provisions apply in their specific state.