Is the Transfer Agreement for Closet Storage Concepts governed by New Jersey law?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
As you know, you and CLOSETS UNLIMITED OF NEW JERSEY, INC., a New Jersey corporation ("Franchisor") are entering into a Franchise Agreement (the "Franchise Agreement") for the operation of a Closet & Storage Concepts business (the "Franchised Business"). The purpose of this Questionnaire is to determine whether any statements or promises were made to you by employees or authorized representatives of the Franchisor, or by employees or authorized representatives of a broker acting on behalf of the Franchisor that have not been authorized, or that were not disclosed in the Disclosure Document or that may be untrue, inaccurate or misleading. The Franchisor, through the use of this document, desires to ascertain (a) that the undersigned, individually, and as a representative of any legal entity established to acquire the franchise rights, fully understands and comprehends that the purchase of a franchise is a business decision, complete with its associated risks, and (b) that you are not relying upon any oral statement, representations, promises or assurances during the negotiations for the purchase of the franchise which have not been authorized by Franchisor.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Closet Storage Concepts Franchise Agreement is between the franchisee and Closets Unlimited of New Jersey, Inc., a New Jersey corporation. This indicates that the Franchise Agreement is likely governed by New Jersey law, as the franchisor is incorporated and has its principal business address in New Jersey.
Furthermore, Exhibit 7, the Disclosure Questionnaire, specifies that it is intended for individuals entering into a Franchise Agreement with Closets Unlimited of New Jersey, Inc., a New Jersey corporation, for operating a Closet & Storage Concepts business. This questionnaire aims to confirm that franchisees understand the business decision and are not relying on unauthorized representations, reinforcing the connection to New Jersey law.
Additionally, the Personal Guaranty agreement requires that the guarantors agree that the governing law and methods for resolution of disputes which govern this Guaranty shall be the same as those outlined in the Franchise Agreement. This further suggests that the Franchise Agreement, and by extension any transfer agreements related to it, would be governed by New Jersey law.