Maine Franchise Owners Association

You work hard in Maine! Together we can make Maine a better place for Business.

Click here to join the Maine Franchise Owners Association

  • Home
  • About Franchising
    • History of Franchising
    • Franchising in Maine
  • About MFOA
    • Why Join MFOA?
    • Terms of Use
  • Membership Info
    • Membership Levels
    • Sponsor Membership
    • Join Today
  • Contact Us
  • Join Today
  • Sponsor Directory

The Need for Voiding Out State Venue Clauses for Franchise Owners

November 14, 2013 By admin

one way venuePeter Lagarias posted at BlueMauMau a very compelling argument as why it’s important to pass legislation in each state to void litigation forum/venue clauses and allow litigation or dispute resolution in occur in the State the franchise owner has his/her business.

Here are is an excerpt:

Most franchise agreements provide for venue of franchise lawsuits in the home state of the franchisor. In football terms this is called home field advantage. National Football League teams spend the entire regular season jousting for home field in the playoffs with the Seattle Seahawks boasting that they have the most boisterous home field advantage. But franchising lawsuits are too important to give franchisors an unfair forum advantage. Franchisees usually have their life savings and livelihoods on the line in any litigation with their franchisors.

How big of an advantage is home state venue for franchisors?

Imagine a Hawaiian franchisee, in financial distress and seeking relief to avoid termination, but having her case heard in the franchisor’s home state of Florida. She must now locate additional counsel in the franchisor’s state. She then must also pay to travel to Florida for preliminary injunctions, discovery motions and trials. Plus she must pay to fly her witnesses from her business to the mainland and beyond for trial. Like many franchisees faced with such clauses and distant expensive litigation, she may have no choice but to give up because she cannot afford to litigate across the country.

Read more at BlueMauMau

[private_Non-Member]

The message below is for logged in MFOA Members Only:

Comments by Jim Coen, Executive Director, Maine Franchise Owners Association.

One of the most common provisions in franchise agreements is the “forum/venue-selection” clause. Under these provisions, the parties agree that any lawsuit filed by either one of the parties will be brought only in a court in a specified city and state. The chosen court will almost always be in the city where the franchisor has its home office, this clause can often create leverage for the franchisor to settle the dispute in their favor.

A forum-selection clause is used as a cost-shifting tool in franchise contracts. The franchisor, counts on the fact that it would be financially burdensome to have the franchise owner hire lawyers to defend or prosecute lawsuits against the franchisor in a out of state venue. Using the forum-selection provision, the franchisor shifts the burden of traveling for a lawsuit (and obtaining counsel in a sometimes-remote forum) to the franchisee.

Two states, Michigan and Washington have laws that consider forum-selection clauses in franchise agreements to be void – so that a franchise owner protected by the state law will be able to sue and be sued in his or her home state. Other states will stop short of voiding those provisions, but will permit a franchisee who sues the franchisor first to do so in his / her home jurisdiction.

In Maine the Auto Dealers have had “void venue protection” with the Automobile Manufacturers since the 70’s, resulting in litigation having to take place in Maine Courts.

[/private_Non-member]

Filed Under: Fair Franchising, Featured, Franchising, Franchising in Maine Tagged With: Expansion, franchise finance, franchise owners, franchised business, franchised businesses, franchisees, franchising, legal, litigation, maine

Search Maine Franchise Owners Website

Recent Posts

  • FTC Commissioner Chopra Talks Franchise Issues on CNBC September 25, 2020
  • Schakowsky, Scanlon, Jayapal Send Letter to FTC September 25, 2020
  • Senator Cortez Masto (NV) Sends Letter to FTC Concerning Covid-19 Issues May 1, 2020
  • Keith Miller Testifies in Oregon, House Interim Committee On Business and Labor December 1, 2019
  • 2019 Dickey’s BBQ Update October 2, 2019
  • Senator Cortez Masto Introduces SBA Franchise Loan Transparency Act July 31, 2019
More from our Newsroom

Twitter Feed @MaineFOA

Maine Franchise Owners Follow

Representing Maine Franchise Owners

MaineFOA
mainefoa Maine Franchise Owners @mainefoa ·
1 May 2020

Senator Cortez Masto (NV) Sends Letter to FTC Concerning Covid-19 Issues http://mainefranchiseowners.org/senator-cortez-masto-nv-sends-letter-to-ftc-concerning-covid-19-issues/

Reply on Twitter 1256085100032212992 Retweet on Twitter 1256085100032212992 1 Like on Twitter 1256085100032212992 1 Twitter 1256085100032212992
Retweet on Twitter Maine Franchise Owners Retweeted
fairfranchising Fair Franchising Initiative @fairfranchising ·
21 Mar 2020

Hotel Small Business owner's first priority is their Millions of Great employees and their families. Small Business Hotel Owners want to help the federal government in efforts to fight Covid-19 @SpeakerPelosi @senatemajldr @SenSchumer

Reply on Twitter 1241422600317939726 Retweet on Twitter 1241422600317939726 5 Like on Twitter 1241422600317939726 5 Twitter 1241422600317939726
mainefoa Maine Franchise Owners @mainefoa ·
1 Mar 2020

Our Government Protects All Consumers… Except Franchisees! - American Association of Franchisees & Dealers https://www.aafd.org/our-government-protects-all-consumers-except-franchisees/

Reply on Twitter 1233996937524723717 Retweet on Twitter 1233996937524723717 Like on Twitter 1233996937524723717 1 Twitter 1233996937524723717
mainefoa Maine Franchise Owners @mainefoa ·
1 Mar 2020

Registration is now open for 2020 CFA Registration is now open for 2020 CFA Day! Join us in DC on May 20 for an important day on the Hill. http://www.magnetmail.net/actions/email_mobile_web_version.cfm?recipient_id=743713135&message_id=18213463&user_id=NFA_&jobid=47068265

Reply on Twitter 1233994456967204866 Retweet on Twitter 1233994456967204866 Like on Twitter 1233994456967204866 1 Twitter 1233994456967204866
mainefoa Maine Franchise Owners @mainefoa ·
1 Mar 2020

This is a perfect example of the type of legislation needed in Maine to protect local franchise owners.

Keith R Miller @FranchiseeAdvoc

Thank you Rep. Chris Mattos and the 9 bipartisan additional sponsors for introducing Vermont H.890, a comprehensive fair franchising bill. https://www.linkedin.com/posts/keith-miller-a42a5853_draft-bill-template-activity-6638858502699831296-4bNC

Reply on Twitter 1233993694178447361 Retweet on Twitter 1233993694178447361 2 Like on Twitter 1233993694178447361 2 Twitter 1233993694178447361
Load More

Franchise Links of Interest

Franchise News: Blue MauMau

Maine Small Business Association

Maine Offices of SCORE

American Association of Franchisees & Dealers

Coalition of Franchisee Associations

Franchisee Advocacy Consulting

New England Franchise Association

Unhappy Franchisee

© · Maine Franchise Owners Association · 415 Congress Street, Suite #202, Portland, ME 01401 · 207-274-2046 | Mobile Membership Site: MediaRight Technologies