For City Wide franchises in South Dakota, is a provision in the Franchise Agreement restricting jurisdiction or venue to a forum outside of South Dakota valid?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
The "Summary" sections of ITEMS 17(v) and 17(w) entitled Choice of Forum and Choice of Law, respectively, are amended by the addition of the following language:
"Any provision in the Franchise Agreement restricting jurisdiction or venue to a forum outside of South Dakota or requiring the application of the laws of any other state is void with respect to a claim otherwise enforceable under the South Dakota Franchise Act."
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, any provision in the franchise agreement that restricts jurisdiction or venue to a forum outside of South Dakota is void with respect to a claim otherwise enforceable under the South Dakota Franchise Act. This amendment ensures that City Wide franchisees in South Dakota are not forced to litigate disputes in a different state, which could be more costly and inconvenient. This protection is afforded by the South Dakota Franchise Act.
This means that if a City Wide franchisee in South Dakota has a claim against the franchisor that is enforceable under the South Dakota Franchise Act, they can pursue that claim in a South Dakota court, regardless of what the franchise agreement says about where disputes should be resolved. This levels the playing field for franchisees, who may not have the resources to litigate in a distant forum.
It is important for prospective City Wide franchisees in South Dakota to understand this protection and to consult with an attorney to ensure that their rights are protected under the South Dakota Franchise Act. This provision aims to protect franchisees from potentially unfair or burdensome legal proceedings outside of their home state.