Under the Aplus Guaranty, which state's laws govern the construction of the Guaranty agreement?

According to Aplus's 2024 Franchise Disclosure Document, the Guaranty agreement's validity, interpretation, and enforcement will be governed by the internal laws of the State of Texas. This applies to any disputes arising out of the relationship between the Guarantor and Aplus, regardless of whether the dispute is based in contract, tort, equity, or other legal principles. However, this is without giving effect to principles of conflicts of law.

For a prospective Aplus franchisee, this means that if a dispute arises related to the Guaranty, Texas law will be used to interpret the agreement. This is important because laws vary from state to state, and Texas law may be more or less favorable to the franchisee or Aplus depending on the specific issue. Franchisees should familiarize themselves with key aspects of Texas law that may affect their rights and obligations under the Guaranty.

The FDD specifies that the laws of Texas will govern the Guaranty, but it also notes that this is 'without giving effect to principles of conflicts of law.' This clause means that even though Texas law is generally applied, if there's a conflict of laws issue (i.e., if the laws of another state or jurisdiction are relevant to the dispute), the court will not consider which state's laws should take precedence. Instead, Texas law will be applied regardless. This simplifies the legal process but may also have implications for the outcome of any legal disputes.