For Auntie Annes franchise agreements, which state's laws govern disputes related to non-competition covenants?

According to Auntie Annes's 2024 Franchise Disclosure Document, disputes regarding non-competition covenants are governed by the laws of the state in which the franchisee's shop is located. This is an exception to the general rule that Georgia law applies to all other disputes arising from the franchise agreement.

This means that if a dispute arises over the non-compete clause, such as whether a franchisee is violating it or whether the clause is enforceable, the laws of the state where the Auntie Annes shop operates will be applied. This is important for prospective franchisees to understand because non-compete laws vary significantly from state to state. Some states are more lenient in enforcing these clauses, while others have stricter regulations or may even prohibit them altogether.

For a prospective Auntie Annes franchisee, this choice of law provision means they should familiarize themselves with the non-compete laws in their specific state. They should also consult with an attorney in their state to understand how these laws might affect their rights and obligations under the franchise agreement. This is a fairly common practice in franchising, as it tailors the enforcement of non-compete agreements to the specific legal environment where the franchise operates.