Which state's law governs the Beard Papas Multi-Unit Development Agreement?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 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. Subject to state law. |
| 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 Los Angeles County, California and, if mediation is unsuccessful, then to binding arbitration in Los Angeles County, California. 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 Los Angeles County, California or, if appropriate, the United States District Court nearest to our corporate headquarters at the time such action is filed. This provision is subject to applicable state law. |
| w. | Choice of law | 7.5, 7.6 | California 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 43–51)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, the Multi-Unit Development Agreement is generally governed by California law. However, this is subject to applicable state law and as disclosed in Exhibit I of the FDD. This means that while Beard Papas intends for California law to apply, specific state laws where the franchisee operates may override this provision in certain circumstances.
This is a fairly standard practice in franchising, where a franchisor typically selects a 'home state' law to govern the agreement for consistency. However, franchise laws vary significantly from state to state, and many states have franchise-specific regulations that protect franchisees. These state laws often cannot be waived or superseded by the franchisor's choice of law.
For a prospective Beard Papas multi-unit developer, this means they should be aware that while California law is the starting point, the laws of the state where they will be developing and operating their Beard Papas shops could also come into play. It would be prudent to consult with a franchise attorney to understand how the laws of their specific state might affect the terms of the Multi-Unit Development Agreement and their rights as a franchisee. Exhibit I of the FDD should also be carefully reviewed.