Under the Burger King Developer Agreement, what is the governing law and jurisdiction for resolving disputes?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything to the contrary set forth in the Franchise Agreement, the following provisions shall supersede and apply to all BURGER KING franchises offered and sold in the State of North Dakota:
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- The North Dakota Securities Commissioner has determined that it is unfair and unequitable under the North Dakota Franchise Investment Law for the franchisor to require the franchisee to sign a general release upon renewal of the Franchise Agreement. Therefore, any requirement that the franchisee signs a release upon renewal of the Franchise Agreement is deleted.
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- The Franchise Agreement is revised to provide that covenants not to compete are generally considered unenforceable in the state of North Dakota.
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- The North Dakota Securities Commissioner has determined that it is unfair and unequitable under the North Dakota Franchise Investment Law for the franchisor to require the franchisee to consent to the jurisdiction of courts located outside of North Dakota. Therefore, any references in the Franchise Agreement to any requirement that the franchisee consents to the jurisdiction of courts located outside of North Dakota are deleted.
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- The North Dakota Securities Commissioner has determined that it is unfair and unequitable under the North Dakota Franchise Investment Law for the franchisor to require the franchisee to agree to arbitration or mediation of disputes at a location that is remote from the site of the franchisee's business. Therefore, any references in the Franchise Agreement to any requirement that the franchisee consents to arbitration or mediation located outside of North Dakota are amended to include the following:
"Pursuant to the North Dakota Franchise Investment Law, the site of arbitration or mediation
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 109–124)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, the governing law and jurisdiction for resolving disputes varies by state. For instance, the Development Agreement for North Dakota franchises will be governed by the laws of North Dakota. In Illinois, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void; however, the franchise agreement may provide for arbitration to take place outside of Illinois.
In California, the Development Agreement requires the application of Florida laws, but this provision may not be enforceable under California law. Similarly, in North Dakota, the North Dakota Securities Commissioner has determined that it is unfair and inequitable under the North Dakota Franchise Investment Law for Burger King to require franchisees to consent to the jurisdiction of courts located outside of North Dakota. Therefore, any references in the Franchise Agreement to any requirement that the franchisee consents to the jurisdiction of courts located outside of North Dakota are deleted.
For prospective Burger King franchisees, this means that the specific terms regarding governing law and jurisdiction will depend on the state in which the franchise is located. Franchisees should carefully review the specific amendments and provisions applicable to their state to understand their rights and obligations regarding dispute resolution. It is advisable to seek legal counsel to fully understand the implications of these provisions in the context of their specific franchise agreement and state laws.