For the Carvel Guaranty, what state's laws govern its construction, and are there any exceptions?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
This Guaranty is to be construed under and governed by the law of the State of Georgia without regard to Georgia, or any other, choice of law or conflicts of law principles.
If any provision of this Guaranty would not be enforceable under the laws of Georgia, and if the business franchised under the Franchise Agreement is located outside of Georgia and the provision would be enforceable under the laws of the state in which the franchised business is located, then that provision, and only that provision, will be interpreted and construed under the laws of that state.
Nothing in this Guaranty is intended to invoke the application of any franchise, business opportunity, antitrust, "implied covenant," unfair competition, fiduciary, or other doctrine of law of Georgia or any other state.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the Guaranty is generally governed by the laws of the State of Georgia. This means that any legal disputes or interpretations regarding the Guaranty will typically be subject to Georgia law, irrespective of conflict of law principles.
However, there is an exception to this rule. If a Carvel franchise is located outside of Georgia, and a specific provision of the Guaranty would not be enforceable under Georgia law but would be enforceable under the laws of the state where the franchise is located, then that specific provision will be interpreted and construed under the laws of the state in which the franchised business is located. This ensures that certain provisions of the Guaranty can be upheld based on the laws of the state where the franchise operates.
The Guaranty explicitly states that nothing within it is intended to invoke franchise, business opportunity, antitrust, or similar legal doctrines of Georgia or any other state. This clarifies that the Guaranty's interpretation should primarily focus on contract law rather than specialized franchise or business regulations. This approach provides a degree of flexibility, allowing for the application of local state laws in specific instances where it ensures enforceability, while generally maintaining Georgia law as the primary governing framework.