If a sub-article in the Casiola Franchise Agreement is inconsistent with the Hawaii Franchise Investment Law, which law controls according to the Hawaii Franchise Agreement Amendment?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
The Hawaii Franchise Investment Law provides rights to the franchisee concerning non-renewal, termination and transfer of the Franchise Agreement. If this Sub-article contains a provision that is inconsistent with the Hawaii Franchise Investment Law, the Hawaii Franchise Investment Law will control.
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- Sub-Article 15.B.(8). Sub-article 15.B.(8), under the Article section titled "Conditions for Renewal," is supplemented by the addition of the following:
- ; provided, however, that all rights enjoyed by Franchisee and any causes of action arising in Franchisee's favor from the provisions of the Hawaii Franchise Investment Law, shall remain in force; it being the intent of this provision that the non-waiver provisions of the Hawaii Franchise Investment Law be satisfied; and
The Hawaii Franchise Investment Law provides rights to the franchisee concerning non-renewal, termination and transfer of the Franchise Agreement. If this subarticle contains a provision that is inconsistent with the Hawaii Franchise Investment Law, the Hawaii Franchise Investment Law will control.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, specifically the Hawaii Franchise Agreement Amendment, the Hawaii Franchise Investment Law will take precedence if any sub-article within the Franchise Agreement is inconsistent with it. This protection extends to Sub-Article 14.C.(6) regarding "Conditions for Approval of Transfer" and Sub-Article 15.B.(8) regarding "Conditions for Renewal." This ensures that the franchisee's rights under Hawaii law are upheld.
This provision is included to satisfy the non-waiver provisions of the Hawaii Franchise Investment Law, meaning a franchisee cannot unintentionally give up their rights under the law through the franchise agreement's standard terms. This is a significant protection for franchisees, as franchise agreements are often drafted to favor the franchisor.
For a prospective Casiola franchisee in Hawaii, this means that the Hawaii Franchise Investment Law provides a baseline of rights related to non-renewal, termination, and transfer of the franchise. If the standard Casiola franchise agreement attempts to limit these rights, the Hawaii law will override those limitations, offering stronger legal protection to the franchisee.
It is important for franchisees to be aware of the specific rights granted by the Hawaii Franchise Investment Law and to consult with legal counsel to fully understand their protections. This amendment aims to ensure that franchisees in Hawaii are not disadvantaged by potentially conflicting terms in the standard franchise agreement.