Which state's laws govern the Carvel franchise agreement?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Illinois law governs the Franchise Agreement.
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- In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
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- Your rights upon Termination and Non-Renewal are set forth in Sections 19 and 20 of the Illinois Franchise Disclosure Act.
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- In conformance with Section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the franchise agreement is generally governed by Georgia law. However, this is subject to certain exceptions and addenda for specific states.
Specifically, if a provision within the Guaranty (presumably related to the Franchise Agreement) is unenforceable under Georgia law, but enforceable under the laws of the state where the franchised business is located outside of Georgia, then the law of that state will govern that specific provision. This ensures that certain protections and legal requirements specific to the franchisee's location are respected.
Furthermore, addenda for states like Illinois, Indiana, North Dakota, and Rhode Island stipulate that certain provisions of the Franchise Agreement, particularly those related to jurisdiction, choice of law, and waivers, may not be enforceable or are superseded by the laws of those states. For example, Illinois law governs the Franchise Agreement for franchises in Illinois, and North Dakota law may prevent franchisees from consenting to the jurisdiction of a court outside of North Dakota. Similarly, Rhode Island law voids any provision restricting jurisdiction or requiring the application of another state's laws. Therefore, prospective Carvel franchisees should carefully review the addendum specific to their state to understand which laws ultimately govern their agreement.