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Court Watch

By Michael W. Tyler

Forum Selection Clauses Are Presumptively Valid and Enforceable

It is typical for franchise agreements to contain forum selection clauses that require any dispute to be resolved in the state and federal district in which the franchisor has its headquarters or principal place of business. The rationale behind such forum selection clauses is quite obvious. They provide the franchisor with the convenience and advantage of litigating on its home turf where it presumably has the greatest familiarity with the law and the courts. Additionally, such clauses significantly reduce the expense that a franchisor might otherwise incur in litigating against franchisees in distant locales. Finally, and perhaps most significantly, by confining all litigation to its own backyard, a franchisor maximizes the prospect of benefiting from any local goodwill that might affect the litigation process, while minimizing the risk of being the victim of prejudicial “home cooking” that might be served up in a franchisee's foreign kitchen.

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