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Court Watch

By Jon Swierzewski
October 30, 2006

Arbitration Forum Selection Clause Upheld By Federal Court

In a case spanning the width of the country, a Seattle-based franchisor had to defend its arbitration forum selection clause from attack by a former franchisee. Gill v. World Inspection Network International, Inc., 2006 WL 2166821 (E.D.N.Y. July 31, 2006).

Timothy Gill operated a World Inspection Network ('WIN') franchise in New York for 5 years. In the process of becoming a franchisee, Gill received a fairly typical array of documents from WIN, including a Uniform Fran-chise Offering Circular and a proposed franchise agreement. The franchise agreement said that all disputes (with limited exceptions not relevant to the court's decision) regarding the franchise relationship were to be resolved by arbitration. The arbitration clause in the franchise agreement specifically identified as arbitrable disputes any disagreement over the validity of any portion of the franchise agreement itself. The franchise agreement specified that the arbitration would take place in King County, WA.

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