Under the Cicis Area Development Agreement, what state's law governs the agreement, subject to applicable federal and state law?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or other Agreement | Summary | |
|---|---|---|---|
| t. Integration/ merger clause | Franchise Agreement - Section 17.B. | Only the terms of the Franchise Agreement, including its exhibits, schedules and attachments (including System Standards in the Manual, which we may revise at our discretion) are binding (subject to applicable state law). Any representations or promises outside of the Disclosure Document and franchise agreement may not be enforceable. | |
| Area Development Agreement - Section 10.F | Only the terms of the Area Development Agreement, including its exhibits, schedules and attachments (including System Standards in the Manual, which we may revise at our discretion) are binding (subject to applicable state law). Any representations or promises outside of the Disclosure Document and franchise agreement may not be enforceable. | ||
| u. | Dispute | Franchise | Not applicable |
| resolution by | Agreement | ||
| arbitration or mediation | Area Development Agreement | Not applicable | |
| v. | Choice of forum | Franchise Agreement - Section 17.E | Subject to applicable state law, the state or federal district courts located in the state, county, or judicial district where our or our successor's or assign's primary headquarters (currently, Dallas, Texas) |
| Area Development Agreement - Section 9.A | Subject to applicable state law, the state or federal district courts located in the state, county, or judicial district where our or our successor's or assign's primary headquarters (currently, Dallas, Texas) | ||
| w. | Choice of law | Franchise Agreement - Section 17.E. | Texas law (subject to applicable federal and state law) |
| Area | Texas law (subject to applicable federal and state law) | ||
| Development | |||
| Agreement | |||
| - | |||
| Section 9.B |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–53)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the Area Development Agreement is governed by Texas law, but this is subject to applicable federal and state law. This means that while the agreement is primarily interpreted and enforced under Texas law, any relevant federal laws or state laws that conflict with Texas law will take precedence.
For a prospective Cicis area developer, this clause is important because it establishes the legal framework within which the agreement will operate. While Texas law provides the foundation, developers need to be aware of any federal or state laws that might affect their rights and obligations. This could include laws related to business operations, employment, or consumer protection.
It is common practice in franchising to specify a choice of law within the franchise agreement. This provides clarity and predictability regarding the legal rules that will govern the relationship between the franchisor and franchisee. However, the inclusion of the phrase "subject to applicable federal and state law" acknowledges that the chosen state's law cannot override conflicting federal or state regulations. Franchisees should consult with legal counsel to understand the implications of the choice of law provision and how it interacts with other applicable laws.