What is the governing law for the Carls Jr. agreement, and where is the exclusive jurisdiction and venue for disputes?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
8.2 Governing Law. This Agreement and any claim or controversy arising out of, or relating to, rights and obligations of the parties under this Agreement and any other claim or controversy between the parties shall be governed by and construed in accordance with the laws of the State of Tennessee without regard to conflicts of laws principles.
8.5 Jurisdiction. The parties agree that, to the extent any disputes cannot be resolved directly between them, Franchisee shall file any suit against CKR only in the federal or state court having jurisdiction where CKR's principal offices are located at the time suit is filed.
CKR may file suit in the federal or state court located in the jurisdiction where CKR's principal offices are located at the time suit is filed, in the jurisdiction where Franchisee resides or does business, where any Franchised Restaurant is or was located, where the claim arose or where Franchisor has its principal offices at the time suit is filed.
Franchisee consents to the personal jurisdiction of those courts over Franchisee and venue in those courts.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the franchise agreement and any related claims or disputes are governed by Tennessee law, without regard to its conflict of laws principles. This means that Tennessee law will be used to interpret the agreement and resolve any legal issues that arise, regardless of where the franchisee is located. However, this does not mean that Tennessee franchise law will apply if it wouldn't otherwise be applicable.
For disputes that cannot be resolved directly, the franchisee must file suit against Carls Jr. in a federal or state court with jurisdiction where Carls Jr.'s principal offices are located at the time the suit is filed. Carls Jr., however, has more flexibility; they can file suit against the franchisee in the jurisdiction where their principal offices are located, where the franchisee resides or does business, where any franchised restaurant is or was located, where the claim arose, or where Carls Jr. has its principal offices when the suit is filed. The franchisee consents to the personal jurisdiction and venue of these courts.
This jurisdiction clause is fairly typical in franchise agreements, although some agreements may require disputes to be settled through arbitration rather than in court. The franchisee should be aware that they may have to travel to Tennessee to resolve any legal disputes with Carls Jr., which could increase the cost and complexity of any litigation. Franchisees should consult with an attorney to fully understand the implications of these provisions.