Is the choice of law provision in the Boulder Designs Franchise Agreement subject to state law?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the | Summary | |
|---|---|---|---|
| Franchise Agreement | |||
| a. Length of the franchise | Section 4.1 | 10 years. | |
| term | |||
| b. Renewal or extension of | Section 4.2 | Additional 10-year term if certain conditions | |
| the term | are met. | ||
| Provision | Section in the Franchise Agreement | Summary or modify their business relationship with Us, our Affiliate(s) or any other franchisee. | |
| s. Modification of the | Sections 9.2 and | The Franchise Agreement can be modified | |
| agreement | 22.6 | only by written agreement between you and us. | |
| t. Integration/merger clause | Section 22.6 | Only the terms of the Franchise Agreement and all exhibits to the Franchise Agreement are binding (subject to state law). Any representations or promises made outside of the disclosure document and the Franchise Agreement may not be enforceable. | |
| u. Dispute resolution by arbitration or mediation | Section 23.7 | Except for actions or claims for injunctive relief or specific performance or relating to the Marks, Trade Secrets or Confidential Information, all disputes must be mediated in McLennan County, Texas. (Subject to state law) | |
| v. Choice of forum | Section 23.2 | Litigation must be initiated and maintained in the judicial district in which our principal place of business is located at the time the lawsuit was initiated, currently Waco, Texas. We have the right to seek injunctive relief from any court of competent jurisdiction. (Subject to state law) | |
| w. Choice of law | Section 23.1 | Texas law applies (subject to state law), except that disputes over the Marks will be governed by the United States Trademark Act of 1946. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–44)
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, the choice of law provision in the franchise agreement is subject to state law. Specifically, the franchise agreement stipulates that Texas law applies, but this is subject to state law. This means that depending on the franchisee's location, certain state laws may override the Texas law specified in the agreement.
For instance, the FDD includes state-specific addenda that modify the franchise agreement based on the franchisee's state. For franchisees in Illinois, the Illinois Franchise Disclosure Act dictates that Illinois law governs any claim alleging a violation of the Act, regardless of the agreement stating Texas law. Similarly, for franchisees in Indiana, the Indiana Deceptive Franchise Practices Act requires that Indiana law govern any cause of action arising under Indiana franchise laws.
Furthermore, for franchisees in North Dakota, the Securities Commissioner has determined that a provision requiring a choice of law contrary to the North Dakota Franchise Investment Law may be unenforceable. In California, the application of Texas laws as dictated by the Franchise Agreement may also be unenforceable under California law. These state-specific stipulations highlight that the choice of law provision is not absolute and can be superseded by state laws, offering franchisees certain protections and rights based on their location.