Under the Chesters EFA, what is the governing law regarding conflicts of law principles?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
This EFA is governed by applicable Federal Law and the laws of Alabama with respect to interest and matters that are material to the determination of interest, This EFA is otherwise governed by the laws of Alabama, excluding conflicts of law principles.
If any amount charged, collected or due exceeds the maximum amount permitted by applicable law, Lender shall make necessary adjustments to eliminate the excess.
You consent to the non-exclusive jurisdiction of courts located in Jefferson County, Alabama in any action relating to this EFA.
You waive any objection based on improper venue and waive any right to a jury trial.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters' 2025 Franchise Disclosure Document, the Equipment Finance Agreement (EFA) is governed by the laws of Alabama, excluding its conflicts of law principles. This means that if there is a legal dispute regarding the EFA, Alabama law will be applied directly, without considering which jurisdiction's laws might otherwise be more applicable.
This is significant for a prospective Chesters franchisee because it establishes a clear legal framework for the EFA. Regardless of where the franchisee is located, the EFA will be interpreted and enforced under Alabama law. This provides predictability but also means the franchisee may need to become familiar with Alabama law.
However, the document also states that the EFA is governed by applicable Federal Law and the laws of Alabama with respect to interest and matters that are material to the determination of interest. Furthermore, the franchisee consents to the non-exclusive jurisdiction of courts located in Jefferson County, Alabama, for any actions relating to the EFA and waives any objection based on improper venue and any right to a jury trial. This concentrates legal proceedings in Alabama, which could increase costs and inconvenience for franchisees located elsewhere.