Which state's law governs the Closet Storage Concepts Franchise Agreement?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchise Agreement requires that any litigation be conducted in the then-current State and County where our corporate headquarters is located.
Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
The Franchise Agreement requires application of the laws of New Jersey.
This provision may not be enforceable under California law.
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- Illinois law governs the Franchise Agreement.
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- In conformance with Section 4 of the lllinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of lllinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
Source: Item 23 — RECEIPTS (FDD pages 59–238)
What This Means (2025 FDD)
According to the 2025 Closet Storage Concepts Franchise Disclosure Document, the Franchise Agreement requires application of New Jersey law. However, this provision may not be enforceable under California law. Specifically, the FDD states that prospective franchisees are encouraged to consult with legal counsel to determine the applicability of California and federal laws to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
Furthermore, the addendum required by the state of Illinois states that Illinois law governs the Franchise Agreement. This addendum also states that any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void.
These stipulations mean that depending on the franchisee's location, the laws governing the franchise agreement may vary. Franchisees in California and Illinois should seek legal counsel to understand which laws apply to their specific agreement, as certain provisions, such as those related to venue and governing law, may not be enforceable in their state.