What state's law governs the Bang Cookies Franchise Agreement, and where can exceptions to this be found?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
| q. | Non-competition covenants during the term of the franchise | Not applicable | Not applicable as to Multi-Unit Development Agreement. However, each Shop developed pursuant to Multi-Unit Development Agreement will be subject to non-competition covenants set forth in each respective Franchise Agreement. |
|---|---|---|---|
| r. | Non-competition covenants after the franchise is terminated or expires | Not applicable | Not applicable as to Multi-Unit Development Agreement. However, each Shop developed pursuant to Multi-Unit Development Agreement will be subject to non-competition covenants set forth in each respective Franchise Agreement. |
| s. | Modification of the agreement | 5.3, 7.11 | Only by written agreement between you and us or if governing law requires a modification. We can change the form of the Franchise Agreement for future Shops which will not alter your obligations under the Multi-Unit Development Agreement. |
| t. | Integration/merger clauses | 7.12 | The Multi-Unit Development Agreement is the entire agreement between you and us relating to the development of the Exclusive Territory. Notwithstanding the foregoing, nothing in any agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. |
| u. | Dispute resolution by arbitration or mediation | 7.5, 7.6 | Except for certain claims for injunctive relief, all disputes must first be submitted to non-binding mediation in Bergen County, New Jersey and, if mediation is unsuccessful, then to binding arbitration in Bergen County, New Jersey. This provision is subject to applicable state law. |
| v. | Choice of forum | 7.5, 7.6 | All mediation, arbitration and, if applicable, litigation proceedings must be conducted in, or closest to, State court of general jurisdiction that is within or closest to Bergen County, New Jersey. This provision is subject to applicable state law. |
| w. | Choice of law | 7.5, 7.6 | New Jersey law will govern. However, this provision is subject to state law and as otherwise disclosed in Exhibit I to this Disclosure Document. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–49)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the Franchise Agreement is governed by New Jersey law. However, this is subject to applicable state law, and as disclosed in Exhibit I of the FDD. This means that while Bang Cookies intends for New Jersey law to generally apply, there may be instances where the laws of the state in which the franchise is located will take precedence.
This is a fairly standard practice in franchising, as state laws often regulate specific aspects of the franchise relationship, such as franchise registration, termination rights, and non-compete agreements. These state-specific regulations can override the general choice of law provision in the franchise agreement to protect franchisees within that state.
Prospective Bang Cookies franchisees should carefully review Exhibit I to understand any specific state law exceptions that may apply to them. They should also consult with a legal professional to ensure they fully understand their rights and obligations under both the Franchise Agreement and applicable state laws.