What state's law governs the Carls franchise agreement, subject to applicable state law?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section In Franchise Agreement | 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. |
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 franchise agreement is governed by Tennessee law, but this is subject to applicable state law. This means that while the agreement itself specifies Tennessee law, any conflicting laws of the state where the franchise is located will take precedence.
For a prospective Carls franchisee, this is important because it means that certain aspects of the franchise agreement might be interpreted or enforced differently depending on the state in which they operate their franchise. State-specific franchise laws, for example, could modify the terms of the agreement.
This clause is fairly standard in franchise agreements. Franchise systems often choose a particular state's law to govern their agreements for consistency, but they must also acknowledge that state laws where franchisees operate can have an impact. Prospective franchisees should consult with a legal professional to understand how the laws of their specific state might affect their Carls franchise agreement.