If the Baya Bar Franchise Agreement is inconsistent with California law, which will control?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning termination or non-renewal of the franchise. If the Franchise Agreement is inconsistent with the law, the law will control.
The Franchise Agreement contains liquidated damages clauses. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
The Franchise Agreement contains a covenant not to compete which extends beyond the termination of the franchise. This provision may not be enforceable under California law.
The Department of Financial Protection and Innovation requires that the franchisor defer the collection of all initial fees from California franchisees until the franchisor has completed all its pre-opening obligations and franchisee is open for business.
Statements 5 and 12 of Attachment 1 (Franchisee Acknowledgement Statement) to the Franchise Agreement is hereby deleted.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, if there is any inconsistency between the Franchise Agreement and California law, California law will take precedence. This is particularly relevant for franchisees in California due to specific state regulations.
Several clauses within the standard Baya Bar Franchise Agreement may not be enforceable in California. These include provisions related to the application of Pennsylvania law and forum, certain liquidated damages clauses, and non-compete covenants extending beyond the franchise term. California law provides specific rights to franchisees concerning termination or non-renewal, as outlined in the California Business and Professions Code Sections 20000 through 20043.
Furthermore, the Department of Financial Protection and Innovation mandates that Baya Bar must defer the collection of all initial fees from California franchisees until all pre-opening obligations are met and the franchise is open for business. This ensures that franchisees are not burdened with upfront costs before the franchise is operational. Statements 5 and 12 of Attachment 1 (Franchisee Acknowledgement Statement) to the Franchise Agreement are deleted for California franchisees, indicating further modifications to comply with California law.