Does the Burros Fries Franchise Agreement acknowledge that court decisions in certain states could supersede the agreement regarding termination and renewal?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
These and other states may have court decisions that may supersede the Franchise Agreement in your relationship with the Franchisor, including the areas of termination and renewal of your franchise.
II. POST-TERM COVENANTS NOT TO COMPETE
For franchises governed by laws of the following states:
CALIFORNIA, CONNECTICUT, HAWAII, ILLINOIS, INDIANA, MARYLAND, MICHIGAN, MINNESOTA, NEW YORK, NORTH DAKOTA, RHODE ISLAND, SOUTH DAKOTA, VIRGINIA, WASHINGTON, WISCONSIN
These states have statutes which limit the Franchisor's ability to restrict your activity after the Franchise Agreement has ended.
California Business and Professions Code Section 16,600 Michigan Compiled Laws Section 445.771 et seq. Montana Codes Section 30-14-201 North Dakota Century Code Section 9-08-06 Oklahoma Statutes Section 15-217-19 Washington Code Section 19.86.030
Other states have court decisions limiting the Franchisor's ability to restrict your activity after the Franchise Agreement has ended.
III. TERMINATION UPON BANKRUPTCY
For franchises governed by laws of the following states:
CALIFORNIA, CONNECTICUT, ILLINOIS, INDIANA, MARYLAND, MICHIGAN, MINNESOTA, NEW YORK, VIRGINIA, WASHINGTON, WISCONSIN
A provision in the Franchise Agreement which terminates the franchise upon the bankruptcy of the franchise may not be enforceable under Title 11, United States Code Section 101.
IV. LIQUIDATED DAMAGES PROVISIONS
The following states have statutes which restrict or prohibit the imposition of liquidated damages provisions:
CALIFORNIA Civil Code Section 1671
INDIANA IC 23.2-2.5-2 MINNESOTA Rule 2860.4400
State courts also restrict the imposition of liquidated damages. The imposition of liquidated damages is also restricted by fair practice laws, contact law, and state and federal court decisions.
For franchises governed by the laws of the state of MINNESOTA, liquidated damage provisions are void.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, the agreement acknowledges that court decisions in certain states may supersede the Franchise Agreement, particularly in the areas of termination and renewal. This means that the standard terms of the franchise agreement might not be fully enforceable in those states, as court rulings could provide franchisees with additional rights or protections beyond what is written in the contract.
The FDD also specifies certain states that have statutes limiting Burros Fries's ability to restrict a franchisee's activities after the franchise agreement ends. These states include California, Connecticut, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. The document lists specific sections of state codes, such as California Business and Professions Code Section 16,600, as examples of such limitations.
Furthermore, the FDD notes that in states like California, Connecticut, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, Virginia, Washington, and Wisconsin, a provision in the Franchise Agreement that terminates the franchise upon the franchisee's bankruptcy may not be enforceable under Title 11, United States Code Section 101. The document also mentions that certain states, including California, Indiana, and Minnesota, have statutes restricting or prohibiting the imposition of liquidated damages provisions, with Minnesota voiding such provisions altogether for franchises governed by its laws. These acknowledgements are important for prospective franchisees to understand their rights and obligations may vary based on the state in which they operate their Burros Fries franchise.