What state law governs the Belocal Franchise Agreement?

According to Belocal's 2025 Franchise Disclosure Document, the Franchise Agreement is generally governed by Texas law. Specifically, the agreement will be construed and interpreted in accordance with the laws of Texas, without regard to its conflict of law principles. This means that in most situations, Texas law will be applied to resolve any disputes or interpret the terms of the agreement.

However, this general rule is subject to certain exceptions and amendments depending on the franchisee's location. For instance, franchisees in North Dakota will have the term "Texas" replaced with "North Dakota" in Section 14.A of the agreement, meaning North Dakota law will govern. Similarly, for franchisees in Illinois, Illinois law governs the Franchise Agreement, superseding the standard Texas law provision. These state-specific amendments are designed to ensure compliance with local franchise laws, which often provide additional protections to franchisees.

Prospective Belocal franchisees should carefully review the specific amendments and addenda applicable to their state to understand which laws will govern their agreement. It's also important to note that even when Texas law is specified, certain provisions may not be enforceable under the laws of other states, such as California, which has specific regulations regarding termination, non-renewal, covenants not to compete, liquidated damages, and arbitration. Therefore, consulting with an attorney is crucial to fully understand the implications of the governing law provision and any potential conflicts with local laws.