For Bonchon franchises in Rhode Island, what happens to any Area Development Agreement provision that designates a governing law other than that of 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."
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 a governing law other than that of Rhode Island is deleted from Area Development Agreements issued in the State of Rhode Island. This means that if a Bonchon franchisee signs an Area Development Agreement in Rhode Island, the agreement will be governed by Rhode Island law, regardless of what the original agreement stated. This is to ensure compliance with the Rhode Island Franchise Investment Act.
This protection is further reinforced by the Rhode Island Franchise Investment Act, which states that any provision in a franchise agreement restricting jurisdiction or venue to a forum outside of Rhode Island, or requiring the application of laws from another state, is void with respect to any claim enforceable under the Act. This ensures that Bonchon franchisees in Rhode Island have the right to resolve disputes within their own state and under their own state's laws.
This provision is favorable for prospective Bonchon franchisees in Rhode Island, as it ensures that local laws and legal procedures will govern their Area Development Agreements. Franchisees will not be forced to travel to another state or be subject to unfamiliar legal frameworks in the event of a dispute with Bonchon. This local legal protection can provide a more predictable and fair legal environment for Rhode Island franchisees.