Under what condition can Bonchon designate a different state's law as governing the franchise agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement; all relations between the parties; and, any and all disputes between you and/or any Franchisee Party, on the one hand, and us and or any other Indemnitee, on the other hand whether sounding in law, equity, or otherwise, is to be exclusively construed in accordance with and/or governed by (as applicable) the law of the State of New York without recourse to New York's (or any other) choice of law or conflicts of law principles. If we move our principal headquarters to another state, we reserve the right to designate that state's law as governing, again without recourse to that successor state's (or any other) choice of law or conflicts of law principles, upon written notice to you. If, however, any provision of this Agreement would not be enforceable under the laws of New York, and if the franchised Business is located outside of New York and the provision would be enforceable under the laws of the state in which the franchised Business is located, then the provision (and only that provision) will be interpreted and construed under the laws of that state. Nothing in this Section 32.03 is intended to invoke and shall not be deemed to invoke, the application of any franchise registration and disclosure, franchise relationship, business opportunity, antitrust, "implied covenant", unfair competition, fiduciary or any other doctrine of law of the State of New York, or any successor state we designate (as provided above), which would not otherwise apply by its terms jurisdictionally or otherwise but for the within designation of governing law or which, by virtue of its denominated geographic or subject matter scope, would not by its terms otherwise apply.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the franchise agreement is generally governed by the laws of New York. However, Bonchon reserves the right to designate a different state's law as governing the agreement if it moves its principal headquarters to another state. This change would take effect upon written notice to the franchisee. This designation would occur without considering the new state's or any other jurisdiction's choice of law or conflicts of law principles.
However, there is an exception to this rule. If any provision of the Bonchon Franchise Agreement is unenforceable under New York law, but is enforceable under the laws of the state where the franchised business is located and that business is outside of New York, then that specific provision will be interpreted and construed under the laws of the state in which the franchised business is located. This ensures that certain provisions can still be upheld based on local laws applicable to the franchisee's location.
It's important to note that the designation of a different state's law does not invoke any franchise registration and disclosure, franchise relationship, business opportunity, antitrust, implied covenant, unfair competition, fiduciary, or any other doctrine of law that would not otherwise apply. This means that the change in governing law is limited to the interpretation and enforcement of the agreement itself and does not extend to broader legal principles that might otherwise be applicable.