What is the governing law for the Big Apple Bagels franchise agreement, as amended by this addendum?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Inc. and | This Addendum is to a BAGELS Franchise Agreement dated , 20 between BAB Systems, (Franchisee) to amend said Agreement as follows: |
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| 4. | Section 18.e. of the BAGELS Franchise Agreement on "Governing Law/Consent to Jurisdiction" is deleted in its entirety. |
Illinois law governs the BAGELS Franchise Agreements.
In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a BAGELS Franchise Agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a BAGELS Franchise Agreement may provide for arbitration to take place outside of Illinois.
| 3. Paragraph 18.e. of the BAGELS Franchise Agreement appears therein: | | New York." | on Governing Law/Consent to Jurisdiction shall be amended by the addition of the following language to the original language that | "The foregoing choice of law shall not be considered a waiver of any right conferred upon the Franchisee by the provisions of Article 33 of the General Business Law of the State of |
The BAGELS Franchise Agreement requires application of the laws of the State of Illinois. This provision may not be enforceable under California law.
| are in conflict with that law. | The Wisconsin Fair Dealership Law, Chapter 135 of the Wisconsin Statutes supersedes any provisions of the Franchise Contract or Agreement if such provisions |
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the governing law for the franchise agreement is subject to specific amendments and considerations depending on the franchisee's location. For franchisees operating in North Dakota, Section 18.e. of the Big Apple Bagels Franchise Agreement on "Governing Law/Consent to Jurisdiction" is deleted in its entirety. For franchisees in Illinois, Illinois law governs the Big Apple Bagels Franchise Agreements. Additionally, any provision in a Big Apple Bagels Franchise Agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void, although the agreement may still provide for arbitration to take place outside of Illinois. For franchisees in New York, the choice of law shall not be considered a waiver of any right conferred upon the Franchisee by the provisions of Article 33 of the General Business Law of the State of New York. For franchisees in California, the Big Apple Bagels Franchise Agreement requires application of the laws of the State of Illinois; however, this provision may not be enforceable under California law. Finally, for franchisees in Wisconsin, The Wisconsin Fair Dealership Law, Chapter 135 of the Wisconsin Statutes supersedes any provisions of the Franchise Contract or Agreement if such provisions are in conflict with that law.
These stipulations mean that prospective Big Apple Bagels franchisees need to be aware of how the governing law is modified by the addendum based on their specific state. The deletion or modification of governing law clauses can significantly impact how disputes are resolved and which state's laws will be applied in interpreting the franchise agreement. This is particularly important in areas like termination, renewal, and transfer of the franchise.
For instance, the addendum ensures that franchisees in New York retain all rights under Article 33 of the General Business Law, regardless of the governing law specified in the franchise agreement. Similarly, in California, certain provisions of the franchise agreement, including those related to governing law, may not be enforceable due to California-specific laws. In Wisconsin, the Wisconsin Fair Dealership Law takes precedence over conflicting provisions in the franchise agreement.
Prospective franchisees should carefully review the addendum applicable to their state and consult with legal counsel to understand the full implications of these changes. Understanding these nuances is crucial for protecting their rights and ensuring compliance with local laws. It is also important to note that the Big Apple Bagels franchise agreement requires that litigation of disputes (those not required to be arbitrated) will occur in the State of Illinois with the costs being borne by the losing party; however, this provision may not be enforceable under California law.