Which state's laws does the 360 Painting franchise agreement require to be applied?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
The Indiana Deceptive Franchise Practices Law (Indiana Code 23-2-2.7) contains certain laws governing the relationship between a Franchisor and Franchisee. Certain of these laws conflict with provisions contained in our customary Franchise Agreement and related documents. Set forth below is an overview of certain disclosures contained in the attached Franchise Disclosure Document which are amended by virtue of the Indiana law.
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- The Franchise Agreement and related documents by and between us and you, as an Indiana franchisee, will be governed by Indiana law and not the law of the Commonwealth of Virginia.
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- You, as an Indiana franchisee, have the right to litigate in Indiana and are not restricted to the requirements in the Franchise Agreement to sue only in Albemarle Virginia.
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- The covenants of non-competition with respect to you, as an Indiana franchisee, will be limited to an area equal to the protected area granted to you and other Franchisees.
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- Indiana law prohibits a prospective general release of claims subject to the Indiana Deceptive Franchise Practices Law.
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- The reservation of rights to any specified remedy or limitation of remedies available to you, as an Indiana franchise, contained in Sections 19.1 and 27.4 of the Franchise Agreement is subject to the provisions of the Indiana Deceptive Franchise Practices Law [IC 23-2-2.7-1(10)].
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- The Sections in the Franchise Agreement that relate to termination, non-renewal, governing law, venue for litigation, modification, covenants not to compete and any limitations period for bringing claims are only applicable to the extent they are not inconsistent with or prohibited by Indiana law. Indiana law will control to the extent of any inconsistency or prohibition.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 360 Painting Franchise Disclosure Document, the franchise agreement is generally governed by the laws of the Commonwealth of Virginia. However, this is subject to certain exceptions, particularly for franchisees in specific states like Indiana, Maryland, Minnesota, and New York.
For Indiana franchisees, the 360 Painting franchise agreement explicitly states that Indiana law, not Virginia law, will govern the agreement. This includes aspects related to non-competition covenants, the right to litigate in Indiana, and the applicability of the Indiana Deceptive Franchise Practices Law. Similarly, addenda for Maryland, Minnesota and New York franchisees outline specific instances where those states' laws take precedence over the standard franchise agreement.
These state-specific addenda are crucial for prospective franchisees to understand. They modify the standard 360 Painting franchise agreement to comply with local franchise laws, which vary significantly from state to state. This ensures that franchisees' rights are protected under the laws of their respective states, particularly in areas such as dispute resolution, termination, and waivers of claims. Franchisees should carefully review the addendum for their state to understand how it alters the general terms of the franchise agreement.
In summary, while the 360 Painting franchise agreement is generally governed by Virginia law, state-specific addenda can significantly alter this, mandating that the laws of the franchisee's state apply in certain situations. This is a common practice in franchising to ensure compliance with varying state regulations and to protect the rights of franchisees.