Can state law supersede the choice of law provision in the Bonchon Area Development Agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Area Development Agreement | Summary |
|---|---|---|
| w. Choice of law | Section 18.12 | New York law applies. Your state law may supersede this provision and it may not be enforceable in your state. (Subject to state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 71–81)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the Area Development Agreement specifies that New York law governs the agreement. However, the FDD explicitly states that the franchisee's state law may supersede this provision. This means that depending on the franchisee's location, certain aspects of the agreement could be interpreted and enforced under their state's laws, regardless of what the agreement says about New York law.
This is a critical consideration for prospective Bonchon franchisees. Franchise law varies significantly from state to state, and certain states have franchise-specific laws that protect franchisees. These laws may cover aspects such as termination rights, renewal options, and dispute resolution processes. If a franchisee's state law supersedes the choice of law provision, they may have additional rights or protections that are not available under New York law.
It is important for potential Bonchon franchisees to consult with an attorney experienced in franchise law in their specific state. This attorney can advise them on the extent to which their state's laws may override the provisions of the Area Development Agreement and what specific protections are afforded to them. Understanding these nuances is essential for making an informed decision about investing in a Bonchon franchise and for protecting their interests throughout the duration of the franchise relationship.
Bonchon also includes similar language regarding state law potentially superseding various other aspects of the agreement, such as transfer conditions, non-competition covenants, and forum selection. This blanket statement suggests that franchisees should not assume New York law will automatically apply and should always investigate their local state laws in relation to the franchise agreement.