Can Pearce Bespoke require arbitration or litigation to be conducted outside of the franchisee's state?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
e relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on behalf of the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
AMENDMENT TO THE PEARCE BESPOKE FRANCHISING LLC FRANCHISE AGREEMENT REQUIRED BY THE STATE OF ILLINOIS
In recognition of the requirements of the Illinois Franchise Disclosure Act, 815 ILCS §§ 705/1 et seq. (1987) (the "Act"), which govern the attached Board and Brush Creative Studio Franchise Agreement (the "Franchise Agreement"), the parties thereto agree as follows:
- To the extent of any inconsistences, the Franchise Agreement is hereby amended to further state:
"Section 4 of the Act provides that no franchisee shall be required to litigate any cause of action, with the exception of arbitration proceedings, arising under the Franchise Agreement or the Act outside of the State of Illinois."
- To the extent of any inconsistences, the Franchise Agreement is hereby amended to further state:
"Illinois law governs the terms of this Franchise Agreement."
3.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, the franchise agreement includes stipulations regarding litigation and arbitration, particularly in relation to specific state laws. For franchisees in Illinois, the agreement explicitly states that franchisees cannot be required to litigate any cause of action (except for arbitration proceedings) arising under the Franchise Agreement or the Illinois Franchise Disclosure Act outside of Illinois. Furthermore, Illinois law governs the terms of the Franchise Agreement for Illinois franchisees.
For franchisees in North Dakota, the FDD states that to the extent required by North Dakota Franchise Investment Law (NDFIL), arbitration proceedings must take place at a location mutually agreed upon by the franchisee and Pearce Bespoke. The agreement also specifies that any requirement for the franchisee to consent to the jurisdiction of courts outside of North Dakota or the application of laws of a state other than North Dakota does not apply to the extent prohibited by the NDFIL.
These stipulations indicate that Pearce Bespoke tailors certain aspects of its franchise agreement to comply with state-specific franchise laws, offering some protection to franchisees against being forced into unfavorable legal venues or under different state laws. Prospective franchisees should carefully review the addenda applicable to their specific state and consult with legal counsel to fully understand their rights and obligations regarding dispute resolution.