In the event of a conflict of law, which state's law prevails in the Caring Transitions agreement?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement was accepted and executed by Franchisor in Ohio.
Except to the extent governed by the U.S.
Trademark Act of 1946, the Federal Arbitration Act, the laws of the State of Ohio (without reference to Ohio conflict of laws principles) govern all aspects of this agreement, excluding any law regulating the sale of franchises or business opportunities, or governing the relationship between a franchisor and a franchisee, unless the jurisdictional requirements of such laws are met independently without reference to this section; provided, however, that if any of the covenants contained in Article 15 of this agreement would not be enforceable under the laws of Ohio and the franchised business is located outside of Ohio, then such covenants shall be interpreted and construed under the laws of the state in which the franchised business is located.
Ohio law shall prevail in the event of any conflict of law, except as specifically provided otherwise by any applicable state franchise investment laws, rules or regulations.
If any provision of this agreement relating to termination, nonrenewal or assignment of the franchise or choice of law, jurisdiction or venue is inconsistent with any applicable state franchise investment law, rules or regulations, such applicable state law shall apply.
Any addendum to this agreement required by the regulatory authorities of any state for the purpose of disclosing salient provision of such state's law is hereby made a part hereof.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the laws of the State of Ohio govern the franchise agreement, except to the extent governed by the U.S. Trademark Act of 1946 and the Federal Arbitration Act. This excludes any law regulating the sale of franchises or business opportunities, or governing the relationship between a franchisor and a franchisee, unless the jurisdictional requirements of such laws are met independently without reference to this section. Ohio law prevails in the event of any conflict of law, except as specifically provided otherwise by any applicable state franchise investment laws, rules or regulations. If any provision of this agreement relating to termination, nonrenewal or assignment of the franchise or choice of law, jurisdiction or venue is inconsistent with any applicable state franchise investment law, rules or regulations, such applicable state law shall apply. Any addendum to this agreement required by the regulatory authorities of any state for the purpose of disclosing salient provision of such state's law is hereby made a part hereof.
For a prospective Caring Transitions franchisee, this means that the franchise agreement is primarily interpreted under Ohio law. However, there are exceptions. Federal laws regarding trademarks and arbitration take precedence. Additionally, if a state's franchise investment laws conflict with the agreement regarding termination, nonrenewal, assignment, or choice of law, the state law will supersede the agreement. This ensures that franchisees are protected by state-specific regulations designed to govern franchise relationships.
This clause is fairly standard in franchise agreements, as franchisors often choose the laws of their home state to govern the agreement for consistency. However, the inclusion of clauses that defer to state franchise laws where they conflict is important for protecting franchisees. Prospective franchisees should be aware of the specific franchise laws in their state and how they might affect the interpretation and enforcement of their Caring Transitions franchise agreement.