Is the governing law provision in Article 18.F of the Casiola Franchise Agreement subject to any exceptions?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
orth Dakota franchisees to consent to termination or liquidated damages are not enforceable in North Dakota."
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- Article 6 of the Franchise Agreement are hereby amended by the addition of the following language: "Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota."
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- Article 18 of the Franchise Agreement is hereby amended by the addition of the following language: "Covenants requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota may not be enforceable in North Dakota."
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- Article 18 of the Franchise Agreement is hereby amended by the addition of the following language: "for North Dakota franchisees, North Dakota law shall apply."
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- Article 18 of the Franchise Agreement is hereby amended by the addition of the following language: "Provisions requiring a franchisee to consent to a waiver of trial by jury are not enforceable under Section 51-19-09 of the North Dakota Franchise Investment Law."
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- Article 18 of the Franchise Agreement is hereby amended by the addition of the following language: "Provisions requiring the franchisee to consent to a waiver of exemplary and punitive damages are not enforceable under Section 51-19-09 of the North Dakota Franchise Investment Law."
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- Article 18 of the Franchise Agreement is hereby amended by the addition of the following language: "Provisions requiring a franchisee to consent to a limitation of claims within one year have been determined to be unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. Therefore, for North Dakota franchisees, the statute of limitations under North Dakota Law will apply."
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- No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of North Dakota Law are met independently without reference to this amendment.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, Article 18 of the Franchise Agreement, which likely includes the governing law provision in section F, is subject to specific amendments and exceptions, particularly for franchisees in North Dakota, Illinois and New York. For North Dakota franchisees, North Dakota law will apply, and provisions requiring franchisees to consent to the jurisdiction of courts outside of North Dakota may not be enforceable. Additionally, provisions requiring a franchisee to consent to a waiver of trial by jury or exemplary and punitive damages are not enforceable under North Dakota law. Provisions requiring a franchisee to consent to a limitation of claims within one year have been determined to be unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. Therefore, for North Dakota franchisees, the statute of limitations under North Dakota Law will apply.
For Illinois franchisees, Article 18.F is amended to state that Illinois law governs the agreements between the parties, and any provision designating jurisdiction or venue outside of Illinois is void, although arbitration outside Illinois is permitted. For New York franchisees, Article 18 is supplemented to ensure that nothing in the agreement waives any right conferred upon the franchisee by New York General Business Law, Sections 680-695. These amendments collectively modify the standard governing law provision to comply with state-specific franchise laws, ensuring that franchisees' rights under those laws are protected.
These state-specific amendments to Article 18 of the Casiola Franchise Agreement highlight the importance of understanding the legal landscape in the franchisee's specific state. The amendments demonstrate that certain provisions of the franchise agreement may be unenforceable or modified to comply with local laws. Prospective franchisees should carefully review the amendment specific to their state and consult with an attorney to fully understand their rights and obligations under the franchise agreement and applicable state laws.