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Court Watch
One of the methods by which franchisors seek to avoid trial by jury is to include a jury trial waiver provision in their franchise agreements, in which the parties agree to go to trial with a judge only. Franchisors include such pre-dispute jury waivers for the same reasons that they include arbitration provisions, which is to avoid the risk of an unpredictable jury. However, similar to arbitration provisions, the enforceability of the jury trial waiver is widely varied among courts.
In Samica Enterprises, LLC v. Mail Boxes Etc. USA, Inc., Bus. Franchise Guide, 13,985 (CCH) (C.D. Cal. 2008), the franchisor moved to strike the franchisee's demand for a jury, citing the fact that the franchise agreement contained such a jury trial waiver. In considering whether the jury trial waiver was enforceable, the U.S. District Court in the Central District of California stated that the right to jury may only be waived “knowingly and voluntarily.” In determining whether this test is met when a franchise agreement contains a jury trial waiver provision, four factors must be considered: 1) the relative bargaining power of the parties; 2) the extent to which the party understood the provision; 3) the extent to which the provision was negotiated; and 4) the conspicuousness of the provision.
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