Which state's laws govern the Auntie Annes franchise agreement?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
In recognition of the requirements of the Illinois Franchise Disclosure Act of 1987, Ill. Comp. Stat. §§ 705/1 through 705/44, the Disclosure Document for Auntie Anne's Franchisor SPV LLC for use in the State of Illinois is amended to include the following:
ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
- Notice Required By Law:
THE TERMS AND CONDITIONS UNDER WHICH WE MAY TERMINATE YOUR FRANCHISE AND YOUR RIGHTS ON NON-RENEWAL MAY BE AFFECTED BY ILLINOIS LAW, 815 ILCS §§ 705/19 AND 705/20.
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- The provisions of the Franchise Agreement, and all other agreements concerning governing law, jurisdiction, and choice-of-law, will not constitute a waiver of any right conferred on you by the Illinois Franchise Disclosure Act. Illinois law will govern the Franchise Agreement with respect to franchisees under the jurisdiction of the Illinois Franchise Disclosure Act. Consistent with the foregoing, any provision in the Franchise Agreement that designates jurisdiction and venue in a forum outside of Illinois is void with respect to any cause of action that is otherwise enforceable in Illinois.
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- 815 ILCS § 705/41 (Illinois Franchise Disclosure Act) states that "any condition, stipulation, or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of this Act or any other law of this State is void."
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- Section 21.1 (Your Acknowledgements) is deleted from all Illinois Franchise Agreements.
INDIANA ADDENDUM TO DISCLOSURE DOCUMENT
In recognition of the requirements of the Indiana Franchise Disclosure Law, Indiana Code §§ 23-2-2.5-1 through 23-2-2.5-51, and the Indiana Deceptive Franchise Practices Act, Indiana Code §§ 23-2-2.7-1 through 23-2-2.7-10, the Disclosure Document for Auntie Anne's Franchisor SPV LLC for use in the State of Indiana is amended as follows:
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to the 2024 Auntie Annes FDD, the franchise agreement's governing law depends on the franchisee's location. For franchisees in Illinois, the Illinois Franchise Disclosure Act governs the agreement. Similarly, for franchisees in Indiana and Maryland, the franchise agreement is subject to the laws of those states, which supersede any conflicting provisions in the agreement or Georgia law.
For the Guaranty, which is related to the franchise agreement, Georgia law governs its construction and interpretation, irrespective of Georgia's or any other jurisdiction's choice of law or conflicts of law principles. However, if the franchised business is located outside of Georgia and a provision of the Guaranty that is unenforceable under Georgia law would be enforceable under the laws of the state where the business is located, then the law of that state will govern that specific provision.
This means that prospective Auntie Annes franchisees need to be aware of the specific addenda and legal considerations for their state. The FDD includes addenda for Illinois, Indiana, Maryland, and Minnesota, modifying certain terms of the standard franchise agreement to comply with local laws. Franchisees should carefully review these addenda to understand their rights and obligations in their specific state.