Are there any exceptions to the application of Arkansas law regarding franchise regulation in the 7 Brew franchise agreement?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
will be governed by the Laws of the State of Arkansas, without regard to its conflict of Laws rules. However, the provisions of any Arkansas legislation regulating the offer or sale of franchises, business opportunities, or similar interests, or governing the relationship between a franchisor and a franchisee or any similar relationship, will not apply to the matters in clauses (1) through (4) above under any circumstances unless their jurisdictional requirements and definitional elements are met independently without reference to this Section 21.G, and no exemption to their application exists.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to the 2025 7 Brew Franchise Disclosure Document, the franchise agreement is generally governed by Arkansas law. However, there are exceptions under specific circumstances. The provisions of Arkansas legislation regulating franchises, business opportunities, or similar relationships do not automatically apply to certain matters within the franchise agreement.
Specifically, the Arkansas laws regulating the offer or sale of franchises or the relationship between 7 Brew and its franchisees will not apply to specific clauses in the agreement unless the jurisdictional and definitional requirements of those Arkansas laws are met independently, without relying on the section of the franchise agreement that specifies Arkansas law as governing. This means that if a particular situation doesn't independently fall under Arkansas franchise law, those specific Arkansas regulations won't be applied simply because the agreement generally defaults to Arkansas law.
Furthermore, if a 7 Brew franchisee is based in North Dakota or if any franchise-related activities occurred in North Dakota, a rider to the franchise agreement stipulates that North Dakota law will take precedence to the extent required by the North Dakota Franchise Investment Law, regardless of the general governing law. This includes aspects such as releases, covenants not to compete, arbitration, and limitations of claims, ensuring that franchisees in North Dakota receive the protections mandated by North Dakota law.