Under what circumstances will Kentucky state laws regulating franchises or franchisor-franchisee relationships apply to the Chop5 Salad Kitchen franchise agreement?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
This Agreement (this "Agreement") is entered into by the undersigned ("you") in favor of CHOP5 Franchise LLC, a Kentucky limited liability company, and its successors and assigns ("us"), upon the terms and conditions set forth in this Agreement.
If your state requires these modifications, you will sign this State Addendum along with the Franchise Agreement and any Supplemental Agreements. If you sign this State Addendum, only the terms applicable to the state or states whose franchise laws apply to your transaction will govern. If you sign this State Addendum, but none of the state franchise laws listed above applies because their jurisdictional requirements have not been met, then this State Addendum will be void and inapplicable to you.
The Franchise Agreement and Supplemental Agreements require application of the laws of Kentucky.
This provision may not be enforceable under California law.
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to the 2024 Chop5 Salad Kitchen Franchise Disclosure Document, Kentucky law will govern the Franchise Agreement. Specifically, Chop5 Franchise LLC is a Kentucky limited liability company. The Franchise Owner Agreement is entered into in favor of Chop5 Franchise LLC, a Kentucky limited liability company. The Brand Protection Agreement is also entered into in favor of Chop5 Franchise LLC, a Kentucky limited liability company.
However, the FDD also states that certain states have laws governing the franchise relationship and franchise documents, and may require modifications to the FDD, Franchise Agreement, and other related documents. To comply with applicable state laws, a State-Specific Addendum will modify these agreements. The terms of the State Addendum will only apply if the franchisee meets the requirements of the applicable state independently of signing the State Addendum. If the franchisee signs the State Addendum, but none of the state franchise laws listed applies because their jurisdictional requirements have not been met, then this State Addendum will be void and inapplicable.
Notably, the Franchise Agreement and Supplemental Agreements require application of the laws of Kentucky, but this provision may not be enforceable under California law. Prospective franchisees should consult with legal counsel to determine the applicability of state and federal laws to any provisions of the Franchise Agreement or Supplemental Agreement.