What should prospective Checkersrallys franchisees in California consult regarding the applicability of California and federal laws to franchise agreement provisions restricting venue?

According to the 2025 Checkersrallys Franchise Disclosure Document, prospective franchisees in California should seek legal counsel to understand how California and federal laws might affect franchise agreement clauses that limit venue. Specifically, this includes provisions that dictate where legal disputes must be resolved, potentially forcing franchisees to litigate outside of California.

This recommendation highlights the importance of due diligence for potential Checkersrallys franchisees. The FDD advises consulting with a private legal counsel to assess the applicability of California and federal laws, such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act, to any provisions of a franchise agreement restricting venue to a forum outside the State of California. These laws can impact the enforceability of clauses that require disputes to be resolved in a specific location, which may be inconvenient or costly for the franchisee.

By consulting legal counsel, prospective Checkersrallys franchisees can gain a clearer understanding of their rights and obligations under the franchise agreement, especially concerning dispute resolution. This proactive approach can help them make informed decisions and protect their interests in the event of a legal conflict with the franchisor. Given that the franchise agreement requires binding arbitration in Florida, understanding the enforceability of venue restrictions is particularly crucial for California franchisees.