What state's law governs the Chesters EFA?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
Choice of Law; Waiver of Jury Trial: Secured Party is an FDIC-insured institution with its main office in Alabama.
This EFA is governed by applicable Federal Law and the laws of the State of Alabama with respect to interest and matters that are material to the determination of interest.
This EFA is otherwise governed by the law of the State of Alabama, excluding conflicts of law principles.
If any amount charged, collected or due exceeds the maximum amount permitted by applicable law, Secured Party shall make necessary adjustments to eliminate such excess.
You consent to the non-exclusive jurisdiction of the courts located in Jefferson County, Alabama in any action or proceeding relating to this EFA, YOU WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING, AND YOU WAIVE ANY RIGHT TO ASSERT THIS IS AN INCONVENIENT FORUM.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the Equipment Finance Agreement (EFA) is governed by the laws of Alabama. Specifically, federal law and Alabama law apply to matters concerning interest determination. Otherwise, Alabama law governs the EFA, excluding any conflicts of law principles. This means that in most situations, Alabama law will dictate how the agreement is interpreted and enforced.
This is significant for a prospective Chesters franchisee because it establishes the legal framework within which the EFA operates. Regardless of where the franchisee's business is located, Alabama law will generally apply to the EFA. This could have implications for how disputes are resolved, what rights and obligations the franchisee has, and what remedies are available in case of a breach of contract.
The FDD also states that Chesters as the 'Secured Party' is an FDIC-insured institution with its main office in Alabama. Furthermore, the franchisee consents to the non-exclusive jurisdiction of courts located in Jefferson County, Alabama, for any action or proceeding related to the EFA and waives any right to a jury trial. This means Chesters can sue the franchisee in Alabama, but the franchisee may also be able to sue Chesters elsewhere. However, the franchisee has waived their right to a jury trial, which means any trial will be before a judge.
It is important for a potential Chesters franchisee to understand the implications of these provisions and how they might affect their rights and responsibilities under the EFA. Franchisees should seek legal counsel to fully understand the terms of the EFA and how Alabama law may impact their specific situation.