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Anti-Waiver Arguments and Enforcement of Forum-Selection Clauses

By Fredric A. Cohen and Allison R. Grow
August 02, 2014

Anti-waiver provisions in state franchise acts have traditionally been used to trump the venue designated in the franchise agreement and to successfully transfer venue to the franchisee's home state. However, a recent decision from the U.S. District Court for the Eastern District of Michigan has added weight to a small but growing body of cases enforcing forum-selection clauses against franchisees that operate in states with franchise acts containing anti-waiver provisions.

In Allegra Holdings, LLC v. Davis, 2014 U.S. Dist. LEXIS 57086 (E.D. Mich. Apr. 24, 2014), the court held that the anti-waiver provision of the Minnesota Franchise Act simply operates to prohibit franchisors from abrogating the rights afforded by the Act to franchisees. The court concluded that, despite the Act's anti-waiver provision, the clause in the franchise agreement designating venue in Michigan was valid since it did not operate as a waiver of the franchisee's rights under the Act; the franchisee could still sue in Minnesota if it wanted. This ruling may signal a turning of the tide in favor of enforcing the parties' chosen venue.

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