In Michigan, can Pearce Bespoke require arbitration or litigation to be conducted outside of Michigan?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
ADDENDUM TO THE PEARCE BESPOKE FRANCHISING LLC DISCLOSURE DOCUMENT AND FRANCHISE AGREEMENT REQUIRED BY THE STATE OF MICHIGAN
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU:
(a) A prohibition on the right of a franchisee to join an association of franchises.
(b) A requirement that a franchisee assent to a release, assignment, novation, waiver or estoppel which deprives a franchisee of rights and protections provided in this act.
This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.
- (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause.
Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than thirty (30) days, to cure such failure.
- (d) A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures and furnishings.
Personalized materials which have no value to the franchisor and inventory, supplies, equipment, fixtures and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation.
This subsection applies only if: (i) the term of the franchise is less than five (5) years, and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least six (6) months' advance notice of franchisor's intent not to renew the franchise.
- (e) A provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class or type under similar circumstances.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, Michigan law includes specific protections for franchisees. The addendum for Michigan states that certain unfair provisions sometimes found in franchise documents are void and cannot be enforced against the franchisee.
Specifically, the Michigan addendum addresses provisions that might deprive a franchisee of rights and protections under the law. This includes a prohibition on the right of a franchisee to join an association of franchisees, requirements for releases or waivers that diminish franchisee rights, and termination clauses that lack good cause. The addendum also covers provisions related to renewal, ensuring fair compensation for the franchisee's assets if renewal is denied under certain conditions.
Most importantly, for a Pearce Bespoke franchisee in Michigan, the FDD stipulates that these protections mean that if any clause in the franchise agreement attempts to force the franchisee to litigate outside of Michigan, that clause is void and unenforceable. This ensures that Michigan franchisees have the right to resolve disputes within their own state, benefiting from local legal protections.