Are there any exceptions to the governing law provision in the Byrider franchise agreement?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
added at the "Remarks" column in the "Interest" row of the table provided in Item 6 of the Disclosure Document:
The highest rate of interest allowed by California law is 10% annually.
- The following language is added to the end of the chart in Item 17:
California Business and Professions Code Sections 20000 through 20043 provide rights to franchisees concerning termination, transfer or nonrenewal of a franchise. If the Franchise Agreement contains a provision that is inconsistent with the aforementioned law, and the aforementioned law applies, it will control.
The Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec. 101 et. seq.) but Byrider Franchising Partners will enforce it to the extent enforceable.
The Franchise Agreement contains a covenant not to compete which extends beyond the termination of the respective agreement. These provisions may not be enforceable under California law.
The Franchise Agreement requires application of the laws of the State of Indiana with certain exceptions. These provisions may not be enforceable under California law.
The Franchise Agreement requires you to sign a general release of claims on renewal or transfer of the Franchise Agreement. California Corporations Code Section 31512 provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of that law or any rule or order there under is void.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the franchise agreement is generally governed by Indiana law, but there are exceptions depending on the franchisee's location. For franchisees in California, if any provision in the franchise agreement is inconsistent with California Business and Professions Code Sections 20000 through 20043, then California law will take precedence. Similarly, certain provisions like non-compete clauses may not be enforceable under California law.
For franchisees in North Dakota, any state law regulating the offer or sale of franchises or the relationship between Byrider and its franchisees will only apply if its jurisdictional requirements are met independently. The enforceability of restrictions on a franchisee's competitive activities will be governed by the laws of the state where the franchisee's business is located.
For franchisees in Minnesota, the franchise agreement specifies that nothing within it will reduce any of the franchisee's rights under Minnesota Statutes Chapter 80C or their right to any procedure, forum, or remedies provided by Minnesota law. Additionally, Minnesota law may prohibit Byrider from requiring litigation to occur outside of Minnesota or from enforcing jury trial waivers, liquidated damages, termination penalties, or judgment notes.
For franchisees in New York, the choice of law provision should not be considered a waiver of any right conferred upon the franchisee by Article 33 of the General Business Law of the State of New York. These exceptions ensure that franchisees retain certain rights and protections under their local state laws, despite the general governing law being that of Indiana.