Where will arbitration occur if there is a dispute regarding the Stretch Zone Franchise Agreement?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 17.3 ARBITRATION
- (a) FORUM. Except as specifically modified by this ARTICLE and matters involving the remedies in Section 17.4, any controversy or claim under this Agreement, including any claim that this Agreement, or any part of this Agreement, is invalid, illegal or otherwise voidable or void, including any claim of fraud in the inducement, the dispute must be submitted by the dispute initiating party to arbitration before FORUM or any other mutually agreeable arbitration association to be resolved by a single arbitrator.
- (c) Venue. The parties agree that any state laws attempting to prohibit arbitration or void out-of-state forums for arbitration are preempted by the Federal Arbitration Act, and the arbitration will be conducted as provided in Section 17.5.
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 the 2025 Stretch Zone Franchise Disclosure Document, any controversy or claim under the Franchise Agreement will be submitted to arbitration before FORUM or any other mutually agreeable arbitration association. The dispute will be resolved by a single arbitrator.
However, the document does not specify a location or venue for the arbitration proceedings. Instead, it states that any state laws attempting to prohibit arbitration or void out-of-state forums for arbitration are preempted by the Federal Arbitration Act, and the arbitration will be conducted as provided in Section 17.5.
Prospective Stretch Zone franchisees should carefully review Section 17.5 of the Franchise Agreement, as referenced in Section 17.3(c), to understand the specific procedures and venue for arbitration. If the location is not specified, it would be prudent to seek clarification from Stretch Zone regarding where arbitration proceedings will be held to fully understand the potential costs and logistical implications of this clause.