Under what circumstances would federal law govern the Aplus franchise agreement or a specific dispute, overriding the choice of Texas law?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Except to the extent this Agreement or any particular dispute is governed by federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of Texas (without reference to its conflict of laws principles).
- b) Except to the extent this Agreement or any particular dispute is governed by the U.S.
Trademark Act of 1946 or other federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of Texas (without reference to its conflict of laws principles).
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the franchise agreement is generally governed by Texas law. However, there are exceptions where federal law would take precedence. Specifically, the agreement states that if the agreement or a particular dispute is governed by the U.S. Trademark Act of 1946 or other federal law, then federal law will apply.
This means that while Texas law is the default, any issues arising under federal statutes like trademark law would be decided under federal law, regardless of the agreement's general choice of Texas law. This is a standard provision in franchise agreements, as federal laws are supreme to state laws under the U.S. Constitution.
For a prospective Aplus franchisee, this clause is important because it clarifies that certain aspects of the franchise relationship, particularly those involving trademarks, are subject to federal oversight. Franchisees should be aware of federal laws, especially those related to trademarks, as these could impact their rights and obligations under the franchise agreement.