In the Chesters franchise agreement, what law governs claims arising from the relationship between the franchisee and franchisor?

According to Chesters' 2025 Franchise Disclosure Document, the franchise agreement, license, and all claims arising from the relationship between the franchisee and Chesters will be governed by the laws of Alabama, except to the extent governed by United States federal law. This is without regard to Alabama's principles of conflicts of law.

However, there is an exception to this general rule. If the laws of the state where the Chesters restaurant is located require the agreement to be interpreted and construed according to that state's laws, then the agreement will be modified to comply with the applicable provision of that state law regarding such interpretation and construction. This ensures that local state laws are respected and applied where they have jurisdiction over the interpretation of the franchise agreement.

For prospective Chesters franchisees, this means that while the franchise agreement is generally governed by Alabama law, the laws of the state where the restaurant is located could take precedence in certain situations. It is important for franchisees to understand both Alabama law and the laws of their own state to fully grasp their rights and obligations under the franchise agreement. Franchisees should consult with legal counsel to understand how these provisions apply to their specific circumstances.