Under which state's laws will the Bang Cookies agreement be governed, construed, and enforced?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Article 18.F. of the Franchise Agreement, and if Franchisee executes a Development Agreement, Article 7.5 of the Development Agreement, under the heading "Governing Law", shall be amended by the addition of the following statement added after the end of the last sentence of Article 18.F. of the Franchise Agreement and Article 7.5 of the Development Agreement:
Illinois Addendum: Illinois law governs the agreements between the parties to this franchise.
Section 4 of the Illinois Franchise Disclosure Act Provides that any provision in a Franchise Agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a Franchise Agreement may provide for arbitration in a venue outside Illinois.
Your rights upon termination and non-renewal of a Franchise Agreement are set forth in Sections 19 and 20 of the Illinois Franchise Disclosure Act.
Section 41 of the Illinois Franchise Disclosure Act Provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act, or any other law of Illinois is void
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, the franchise agreement's governing law depends on the franchisee's location. For franchisees in Illinois, the Illinois Franchise Disclosure Act dictates that Illinois law governs the agreements. Similarly, for franchisees in North Dakota, North Dakota law shall apply to the agreement. For franchisees in Rhode Island, the Rhode Island Franchise Investment Act stipulates that any provision restricting jurisdiction or requiring the application of another state's laws is void with respect to claims enforceable under their act. In Washington, the Washington Franchise Investment Protection Act is recognized, and in the event of conflict of laws, the provisions of this act prevail. Finally, for franchisees in Hawaii, if any provision is inconsistent with the Hawaii Franchise Investment Law, that law will control.
This means that a Bang Cookies franchisee needs to be aware of the specific state laws that apply to their franchise agreement based on their location. The FDD includes state-specific addenda that modify the standard franchise agreement to comply with local laws. These addenda address issues such as choice of law, jurisdiction, and waivers of rights.
For a prospective Bang Cookies franchisee, this highlights the importance of carefully reviewing the FDD and any state-specific addenda with legal counsel. Understanding which state's laws govern the agreement and what rights are protected under those laws is crucial for making informed decisions and protecting their investment. It also demonstrates that Bang Cookies is taking steps to comply with various state franchise laws, which can provide some assurance to potential franchisees.