For a Belocal franchise in California, what is the effect of the amendment on the choice of law provision?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- a. California Business and Professions Code Sections 20000 through 20043 provide rights to the franchisee concerning termination, transfer, or non-renewal of a franchise. If the Agreement contains a provision that is inconsistent with the law, the law will control.
- b. The Agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the franchise agreement initially requires the application of Texas laws. However, for California franchisees, this provision may not be enforceable under California law. This means that despite what the standard franchise agreement says, California law may take precedence in certain legal matters.
This amendment is significant for prospective Belocal franchisees in California because it clarifies that certain aspects of the franchise agreement will be interpreted and enforced under California law, regardless of what the agreement's choice of law provision states. This protects the franchisee by ensuring that California's franchise laws, which are designed to protect franchisees, will apply.
It is important for potential Belocal franchisees to consult with a legal professional to fully understand their rights and obligations under both the franchise agreement and California law. This will help ensure they are aware of the specific ways in which California law may modify or supersede the terms of the standard franchise agreement.