Can a Punch King Fitness franchisee agree to conduct arbitration outside of their state?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
is addendum is attached is amended as follows to comply with the North Dakota Franchise Investment Law:
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- Any provision of this Agreement restricting jurisdiction or venue to a forum outside the State of North Dakota or requiring the application of the laws of a state other than North Dakota is void.
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- Section 15.1 is amended by the addition of the following sentence:
"Covenants not to compete such as the one described above are generally considered unenforceable in the State of North Dakota."
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- The final two paragraphs of provision XXI(B) are hereby deleted.
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- Section XXIII(D) does not apply to any action to enforce any liability created by the Minnesota Franchise Law. Any claim arising under the Minnesota Franchise Law may be brought in the state of North Dakota.
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- The parties are signing this addendum simultaneously with the Franchise Agreement to which it is attached.
PUNCH KING FITNESS, INC. BUSINESS ORGANIZATION FRANCHISEE: INDIVIDUAL FRANCHISEE: INDIVIDUAL FRANCHISEE:
RHODE ISLAND ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT
The following additional disclosures are required by the Rhode Island Franchise Investment Act:
A condition, stipulation, or provision requiring a franchise to waive compliance with or relieving a person of a duty or liability imposed by or a right provided by this act or a rule or order under this act is void.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to the 2024 Punch King Fitness Franchise Disclosure Document, the ability of a franchisee to agree to conduct arbitration outside of their state depends on the state where the franchise is located.
Specifically, the Rhode Island Addendum states that any provision in the Franchise Agreement that designates jurisdiction or venue in a forum outside the State of Rhode Island is void with respect to a claim otherwise enforceable under the Rhode Island Franchise Investment Act. This means that if a Punch King Fitness franchisee in Rhode Island has a claim enforceable under this act, they cannot be forced to arbitrate or litigate the claim outside of Rhode Island.
Conversely, for California franchisees, the California State Addendum discloses that the franchise agreement requires binding arbitration to occur in San Francisco County, California. The costs of arbitration will be equally shared between Punch King Fitness and the franchisee. This indicates that California franchisees may be required to participate in arbitration within California, regardless of where they are located.
Prospective franchisees should carefully review any state-specific addenda to understand their rights and obligations regarding arbitration and venue. They should also consult with legal counsel to fully understand the implications of these provisions in their specific state.