Does the Boulder Designs Franchise Agreement specify that the choice of law is subject to state law?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the | Summary | |
|---|---|---|---|
| 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) | |
| 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' 2025 Franchise Disclosure Document, the Franchise Agreement includes provisions that are subject to state law. Specifically, Section 23.1 states that Texas law applies, but this is subject to state law. Additionally, the agreement's integration/merger clause in Section 22.6 is also subject to state law, meaning that while the written agreement is intended to be the complete agreement, state laws may have an impact on its interpretation and enforcement. Furthermore, dispute resolution by arbitration or mediation as detailed in Section 23.7 is subject to state law.
This means that while the Boulder Designs Franchise Agreement specifies Texas law, state laws where the franchisee operates may override or modify certain aspects of the agreement. This is particularly relevant for franchisees operating in states with franchise-specific laws, such as California, Illinois, and Indiana, as highlighted in Exhibit I of the FDD. These state-specific addenda can alter provisions related to initial fees, territory, venue, and choice of law to comply with local regulations.
For a prospective Boulder Designs franchisee, this implies that the terms of the Franchise Agreement should be reviewed in conjunction with the specific franchise laws of their state. It is essential to understand how state laws may affect provisions related to termination, renewal, dispute resolution, and non-competition covenants. Consulting with a legal professional experienced in franchise law is crucial to fully grasp the implications of these state-specific variations and ensure compliance with all applicable regulations.