In the event of conflicting laws, which law prevails for a Black Bear Diner franchise?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement and the rights of the parties will not take effect unless and until this Agreement is accepted and signed by Franchisor. Except to the extent this Agreement or any particular dispute is governed by the U.S. Trademark Act of 1946 or other federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of California (without reference to its conflict of laws principles), excluding any law regulating the sale of franchises or governing the relationship between a franchisor and franchisee (developer), unless the jurisdictional requirements of such laws are met independently without reference to this Section; provided, however, that if the covenants in Section 10 of this Agreement would not be enforceable under the laws of California, and the Development Area is located outside of California, then such covenants shall be interpreted and construed under the laws of the state in which the Development Area is located.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, the franchise agreement is generally governed by California law. Specifically, the agreement is construed in accordance with the laws of California, without regard to its conflict of laws principles. This means that if there are legal disputes, California law will be applied, ensuring a consistent legal framework.
However, there are exceptions to this rule. If the U.S. Trademark Act of 1946 or other federal law governs a particular dispute, then federal law will take precedence. Additionally, the franchise agreement excludes any California law regulating the sale of franchises or governing the relationship between a franchisor and franchisee, unless the jurisdictional requirements of such laws are independently met.
Furthermore, if the non-compete covenants in Section 10 of the agreement are unenforceable under California law, and the development area is located outside of California, then the laws of the state where the development area is located will govern those specific covenants. This ensures that the non-compete provisions are enforceable under the laws most relevant to the franchisee's location. Therefore, while California law generally applies, federal law or the law of the state where the Black Bear Diner is located may prevail under certain circumstances.