What state's law governs the Bang Cookies Multi-Unit Development Agreement, and are there any exceptions?
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 Multi-Unit Development Agreement is generally governed by New Jersey law. However, this is subject to state law and as disclosed in Exhibit I of the Disclosure Document. This means that while New Jersey law is the primary governing law, other state laws could potentially apply, especially concerning specific aspects of the agreement or the franchisee's location.
This clause is fairly standard in franchising, as franchisors often choose a specific state's law to govern their agreements for consistency. However, the caveat that it is "subject to state law" acknowledges that certain state-specific franchise laws or regulations may override the general choice of law provision. Franchisees should be aware that the laws of their own state may impact the enforcement or interpretation of certain provisions in the agreement, regardless of the stated choice of law.
Prospective Bang Cookies franchisees should carefully review Exhibit I to understand any specific state law exceptions that may apply to them. It would also be prudent to consult with a legal professional to assess how the laws of their state might interact with the New Jersey law specified in the agreement. This is particularly important if the franchisee's state has strong franchise protection laws, which could provide additional rights or protections beyond what is offered under New Jersey law.