Where will arbitration occur if required by the Stretch Zone Franchise Agreement?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) The Franchise Agreement requires binding arbitration. The arbitration will occur in Broward County, Florida with the costs being borne by the non-prevailing party. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and Federal laws (including Business and Professions Code § 20040.5, Code of Civil Procedure § 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
Source: Item 22 — ITEM -22 CONTRACTS (FDD pages 84–89)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, the Franchise Agreement requires binding arbitration to occur in Broward County, Florida. The costs associated with the arbitration will be borne by the non-prevailing party. This means that if a franchisee and Stretch Zone have a dispute that goes to arbitration, the location of the arbitration hearing will be in Broward County, Florida.
This is a significant point for prospective franchisees to consider, as it may involve travel and associated expenses to attend arbitration hearings in Florida, regardless of where the franchisee's Stretch Zone location is situated. Furthermore, the financial risk of potentially having to cover all arbitration costs if the franchisee does not win the dispute could be substantial.
The FDD also encourages prospective franchisees to seek legal counsel to understand how state and federal laws might apply, especially concerning venue restrictions for forums outside of California. This highlights the importance of understanding one's legal rights and obligations before entering into a franchise agreement with Stretch Zone. Franchisees should consult with a legal professional to fully understand the implications of the arbitration clause and how it interacts with relevant state and federal laws.