Can Punch King Fitness require arbitration or litigation to be conducted outside of Michigan?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
CALIFORNIA STATE ADDENDUM DISCLOSURES:
- 2. The franchise agreement and area development agreement require binding arbitration.
The arbitration will occur in San Francisco County, California, with the costs being borne equally by franchisor and franchisee.
RHODE ISLAND ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT
A provision is a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this act.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, the franchise agreement requires binding arbitration for California franchisees and that the arbitration will occur in San Francisco County, California. This is detailed in the California State Addendum Disclosures.
However, the Rhode Island Addendum to the Franchise Disclosure Document states that any provision in a franchise agreement restricting jurisdiction or venue to a forum outside of Rhode Island, or requiring the application of laws of another state, is void with respect to a claim otherwise enforceable under the Rhode Island Franchise Investment Act.
The FDD does not contain similar addenda for Michigan, so it is unclear whether Punch King Fitness can require arbitration or litigation to be conducted outside of Michigan. A prospective franchisee should consult with legal counsel to determine the enforceability of such provisions in Michigan.