Does the choice of law for the Azal Coffee Agreement include or exclude conflicts-of-law principles?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
(b) The Franchise Agreement amended for use in the State of Indiana specifies that the Agreement and the construction of the Agreement will be governed by the laws of the State of Michigan except that the Indiana Franchise Law (Indiana Code 23-2-2.5 and 23-2-2.7) will control where applicable.
(c) Choice of law--The choice of law provision, which requires application of Michigan laws, will not be considered a waiver of your rights under Article 33 of the General Business Law of the State of New York.
§ 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."
(e) Applicable Laws: Franchise agreements, which specify that they are to be governed by the laws of a state other than North Dakota.
Source: Item 23 — RECEIPTS (FDD pages 51–204)
What This Means (2024 FDD)
According to the 2024 Azal Coffee Franchise Disclosure Document, the franchise agreement for use in Indiana specifies that the agreement and its construction will be governed by Michigan law, except where Indiana Franchise Law applies. For New York franchisees, the choice of law provision requiring application of Michigan laws will not be considered a waiver of their rights under Article 33 of the General Business Law of the State of New York. For Rhode Island franchisees, a provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under the Rhode Island Franchise Investment Act. For North Dakota franchisees, franchise agreements which specify that they are to be governed by the laws of a state other than North Dakota are considered unfair, unjust, or inequitable.
This means that while the Azal Coffee agreement generally defaults to Michigan law, this may not be the case for franchisees in Indiana, New York, Rhode Island, and North Dakota, where local franchise laws take precedence or where such provisions are deemed unenforceable or unfair.
A prospective Azal Coffee franchisee should seek legal counsel to understand how the choice of law provision and potential conflicts with state laws may affect their rights and obligations under the franchise agreement, particularly if they are located in Indiana, New York, Rhode Island, or North Dakota.