For Bonchon franchises in Rhode Island, what happens to any provision in the Franchise Agreement that designates a governing law other than that of Rhode Island?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything to the contrary set forth in the Franchise Agreement, the following provisions will supersede and apply:
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- Any provision in the Franchise Agreement which designates the governing law as that of any state other than the State of Rhode Island is deleted from Franchise 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 Franchise Agreement that designates a governing law other than that of Rhode Island is deleted from Franchise Agreements issued in Rhode Island. This ensures that Rhode Island law will govern the agreement for Bonchon franchises operating in that state. This protection is explicitly outlined in the Rhode Island Addendum to the Franchise Agreement.
This provision is reinforced by Section 19-28.1.-14 of the Rhode Island Franchise Investment Act, which states that any clause in a franchise agreement that restricts jurisdiction or venue to a forum outside of Rhode Island, or requires the application of another state's laws, is void with respect to any claim enforceable under the Act. This means Bonchon franchisees in Rhode Island have the right to resolve disputes under Rhode Island law and within the state's jurisdiction.
This measure is designed to protect Bonchon franchisees in Rhode Island by ensuring that their legal rights and obligations are interpreted under the laws of their own state. It prevents Bonchon from enforcing provisions that might be more favorable to them under the laws of another jurisdiction. This addendum helps to create a more equitable balance in the franchisor-franchisee relationship within the state.