If a provision in the Alloy franchise agreement is inconsistent with the Rhode Island Franchise Investment Act, which provision will control?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
The Rhode Island Franchise Investment Act at Section 19-28.1-14 provides that "a provision in a franchise agreement restricting jurisdiction or venue to a forum outside of this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."
ADDENDUM TO THE FRANCHISE AGREEMENT REQUIRED FOR RHODE ISLAND FRANCHISEES
This Addendum pertains to franchises sold in the State of Rhode Island and is for the purpose of complying with Rhode Island statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended as follows:
-
- The Rhode Island Franchise Investment Act (the "Act") at Section 19-28.1-14 provides that "a provision in a franchise agreement restricting jurisdiction or venue to a forum outside of this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act." The parties agree that to the extent that any provision in any of the Contracts entered into by the parties are inconsistent with the Act, the provisions of the Act shall control. They furthermore expressly agree that Rhode Island law shall be applied to, and govern, any claim between the parties that alleges violation of the Act.
-
- Except as amended herein, the Franchise Agreement will be construed and enforced in accordance with its terms.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, for franchises sold in Rhode Island, the Rhode Island Franchise Investment Act takes precedence over any conflicting provisions in the franchise agreement. Specifically, Section 19-28.1-14 of the Act states that any agreement provision restricting jurisdiction or venue to a location outside of Rhode Island or requiring the application of another state's laws is void if it contradicts the Act. This protection ensures that Rhode Island franchisees have the right to enforce claims under the Act within their own state.
This means that if any part of the Alloy franchise agreement attempts to force a Rhode Island franchisee to resolve disputes in another state or under different state laws, that part of the agreement is unenforceable. The Rhode Island Franchise Investment Act will govern such situations, allowing the franchisee to pursue legal remedies within Rhode Island under Rhode Island law. This addendum is included to ensure compliance with Rhode Island statutes and regulations.
Alloy's standard franchise agreement is amended for Rhode Island franchisees to explicitly state that if any provision in the contracts between Alloy and the franchisee is inconsistent with the Rhode Island Franchise Investment Act, the Act's provisions will control. Furthermore, Rhode Island law will be applied to any claim alleging a violation of the Act. However, all other aspects of the franchise agreement will remain in effect and will be construed and enforced according to its original terms, except as specifically amended by the addendum.