Does the Belocal Franchise Agreement require application of the laws of Texas, and is this provision potentially unenforceable under California law?

According to Belocal's 2025 Franchise Disclosure Document, the Franchise Agreement requires the application of Texas laws. However, this provision may not be enforceable under California law. This means that while the agreement specifies that Texas law governs the contract, a California court might not uphold this provision if it conflicts with California law.

For a prospective Belocal franchisee in California, this is an important consideration. California has specific franchise laws that are designed to protect franchisees. If a provision in the Belocal Franchise Agreement that is governed by Texas law conflicts with California's franchise laws, the California franchisee may find that the California law will take precedence. This could affect various aspects of the franchise relationship, including termination, transfer, and renewal rights.

It is advisable for potential Belocal franchisees in California to consult with legal counsel to understand the implications of the governing law provision and how it interacts with California franchise laws. This will help them to be fully aware of their rights and obligations under the Franchise Agreement and to navigate any potential conflicts between Texas and California law.