What state's law governs the Carls Development Agreement, subject to applicable state law?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| nt | Summary | ||
|---|---|---|---|
| v. Choice of forum | Section 31.B. | Subject to applicable state law, you can only file suit where our principal offices are located. We may file suit in the jurisdiction where our principal offices are located, where you reside or do business, where the Franchised Restaurant is or was located or where the claim arose. | |
| w. Choice of law | Section 31.A. | Subject to applicable state law, Tennessee law applies. |
| Provision | Section In Development Agreement | Summary | |
|---|---|---|---|
| q. | Non-competition covenants during the term of the franchise | Section 12.C. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 61–66)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the Development Agreement is governed by Tennessee law, subject to applicable state law. This is detailed in Item 17, which outlines provisions related to dispute resolution.
In practical terms, this means that if there is a legal dispute regarding the Development Agreement, Tennessee law will generally be applied. However, this is not absolute. If a state has specific laws that override this clause, those state laws would take precedence. This could be due to franchise-specific laws or other consumer protection regulations.
Prospective Carls franchisees should be aware of this clause and understand that while Tennessee law is the default, they should also consult with legal counsel to determine if their local state laws might affect the interpretation or enforcement of the Development Agreement. This is a fairly standard practice in franchising, as franchisors often choose a specific state's law for consistency, but must also comply with local regulations.