If a provision in the Alloy Area Development Agreement is inconsistent with California Business and Professions Code Sections 20000 through 20043, which law will control?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
This Addendum pertains to franchises sold in the State of California and is for the purpose of complying with California statutes and regulations. Notwithstanding anything which may be contained in the body of the Area Development Agreement to the contrary, the Agreement is amended as follows:
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- California Business and Professions Code Sections 20000 through 20043, the California Franchise Relations Act, provide rights to the franchisee concerning termination, transfer or non-renewal of a franchise. If the area development agreement contains a provision that is inconsistent with the law, the law will control.
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- In all other respects, the Area Development Agreement will be construed and enforced according to its terms.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the California Addendum to the Area Development Agreement addresses the relationship between the agreement and California law. Specifically, California Business and Professions Code Sections 20000 through 20043, also known as the California Franchise Relations Act, grants franchisees certain rights regarding termination, transfer, and non-renewal of a franchise agreement.
According to the addendum, if any provision within the Alloy Area Development Agreement is inconsistent with these sections of the California Business and Professions Code, the law will take precedence. This means that the protections and rights afforded to the franchisee under California law will override any conflicting terms in the agreement.
This provision is important for prospective Alloy franchisees in California because it ensures that their rights under state law are protected. It also encourages franchisees to seek legal counsel to fully understand their rights and obligations under both the franchise agreement and California law.