Are there any exceptions to Texas law governing the C12 Group franchise agreement?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
| u. Dispute resolution by | XII, Exhibit F | All matters can be appealed up through C12's |
|---|---|---|
| arbitration or mediation | defined three-step dispute resolution process which | |
| culminates in Christian arbitration pursuant to which | ||
| the parties engage three Bible-believing Christian | ||
| arbitrators as follows: one selected by the franchisee, | ||
| one selected by C12, and one selected by such two | ||
| arbitrators. The remedy recommended by the | ||
| arbitration panel will be binding and final with no | ||
| further recourse by either party. | ||
| Subject to state law. | ||
| v. Choice of forum | XII, Exhibit F | Litigation must be conducted in Texas unless |
| otherwise stated in Exhibit F for certain State | ||
| Disclosures (subject to applicable state law). | ||
| w. Choice of Law | XII | Texas law will govern (subject to applicable state |
| law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–40)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, the franchise agreement is generally governed by Texas law. However, this is subject to applicable state law, meaning that certain states may have specific addenda or legal provisions that supersede or modify the standard terms outlined in the agreement.
For instance, the FDD includes addenda for North Dakota and Minnesota that address specific sections of their franchise investment laws. In North Dakota, the addendum stipulates that arbitration or mediation must occur at a location agreeable to all parties and within a reasonable distance of the franchisee's business. Franchisees in North Dakota are also not required to consent to the jurisdiction of Texas courts and may fall under the jurisdiction of North Dakota courts. Furthermore, the agreement will be governed by North Dakota law if agreed upon by all parties, and franchisees cannot waive their right to a jury trial.
Similarly, the Minnesota addendum prohibits C12 Group from requiring litigation outside of Minnesota and ensures that no clause in the franchise agreement reduces a franchisee's rights under Minnesota law. Minnesota franchisees are entitled to specific notices of termination or non-renewal, and they cannot waive their right to a jury trial or consent to liquidated damages or termination penalties. These state-specific provisions take precedence over the standard terms of the C12 Group franchise agreement when applicable.