Where must arbitration involving a Stretch Zone franchise purchased in North Dakota be held?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) If the Franchise Agreement requires mediation or arbitration to be conducted in a forum other than the State of North Dakota, the requirement may be unenforceable under the North Dakota Franchise Investment Law.
Arbitration involving a Franchise purchased in the State of North Dakota must be held either in a location mutually agreed upon before the arbitration or if the parties cannot agree on a location, the arbitrator will determine the location.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, if a Franchise Agreement requires mediation or arbitration to be conducted in a location other than the State of North Dakota, that requirement may be unenforceable under the North Dakota Franchise Investment Law. Arbitration involving a Stretch Zone franchise purchased in North Dakota must be held either in a location mutually agreed upon before the arbitration, or if the parties cannot agree on a location, the arbitrator will determine the location.
This stipulation protects Stretch Zone franchisees in North Dakota by ensuring that they are not forced to travel to a different state for arbitration proceedings. This can save franchisees significant costs related to travel, accommodation, and legal representation, as well as the inconvenience of being away from their business and home.
It is important for prospective Stretch Zone franchisees in North Dakota to understand this provision, as it ensures that any disputes can be resolved within the state, under the protection of North Dakota law. This amendment aims to create a fairer legal environment for franchisees operating in North Dakota, aligning the franchise agreement with state regulations designed to protect franchisee rights.