For Bonchon Area Development Agreements in Rhode Island, what happens to provisions that designate governing law as a state other than Rhode Island?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
RHODE ISLAND ADDENDUM TO AREA DEVELOPMENT AGREEMENT
Notwithstanding anything to the contrary set forth in the Area Development Agreement, the following provisions will supersede and apply:
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- Any provision in the Area Development Agreement which designates the governing law as that of any state other than the State of Rhode Island is deleted from Area Development Agreements issued in the State of Rhode Island.
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- Section 19-28.1.-14 of the Rhode Island Franchise Investment Act, as amended by laws of 1993, provides that "a provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."
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- No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee (or area developer) in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
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- This Addendum may be executed in counterparts, which together shall constitute one and the same instrument. Signatures via DocuSign, .PDF file, facsimile, or other electronic format have the same force and effect as originals.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, any provision in the Area Development Agreement that designates the governing law as a state other than Rhode Island is deleted for Area Development Agreements issued in Rhode Island. This means that Rhode Island law will govern the agreement, regardless of what the standard agreement might say. This change is reflected in the Rhode Island Addendum to the Area Development Agreement.
This modification is due to Section 19-28.1.-14 of the Rhode Island Franchise Investment Act, which states that any provision restricting jurisdiction or venue to a forum outside of Rhode Island or requiring the application of another state's laws is void with respect to claims enforceable under the Act. This ensures that Bonchon franchisees in Rhode Island have the protection of their local laws and courts.
Furthermore, no statement, questionnaire, or acknowledgement signed by a Bonchon area developer in connection with the commencement of the franchise relationship can waive claims under Rhode Island franchise law, including claims of fraud in the inducement, or disclaim reliance on statements made by Bonchon. This provision supersedes any other term in any document executed in connection with the franchise, reinforcing the protection of area developers' rights under Rhode Island law.