Under the Byrider franchise agreement, which state's law governs the interpretation and construction of the agreement?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- 20.5 Governing Law. This Agreement takes effect upon its acceptance and execution by the Company in Indiana and shall be interpreted and construed in accordance with Indiana law.
Any dispute between the parties, except as stated in this Section 20.5, shall be governed by the laws of the State of Indiana which law shall prevail in any event of conflict of law, except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. 1051 et seq.), the United States Arbitration Act (9 U.S.C. 1 et seq.), or other federal law.
The enforceability of the covenants set forth in Article
XVIII shall be determined in accordance with the law of the state in which Franchisee's Business is located.
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 governed by Indiana law. Specifically, the agreement takes effect once it is accepted and executed by Byrider in Indiana. Therefore, Indiana law will be used to interpret and construe the agreement.
However, there are exceptions to this general rule. For example, disputes related to the United States Trademark Act of 1946, the United States Arbitration Act, or other federal laws will be governed by those respective federal laws. Additionally, the enforceability of non-compete covenants will be determined by the law of the state in which the franchisee's business is located.
Notably, a rider to the franchise agreement states that if the offer of the franchise is made or accepted in Illinois, or if the franchisee is domiciled in Illinois, then the laws of Illinois will govern the agreement, except for the U.S. Federal Arbitration Act and other federal laws. This means that depending on the franchisee's location and where the agreement was made, the governing law could shift from Indiana to Illinois.