Which state's law governs the Counselor Realty Franchise Agreement?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section(s) in Franchise or Other Agreement | Summary |
|---|---|---|
| j. Assignment of contract by franchisor | Section 9.4 | Counselor may transfer its interest in Franchise Agreement by notice to you |
| k. "Transfer" by franchisee -- definition | Section 9.1 | Includes transfer of your interest in Franchise Agreement, the Office, Business or Business assets, or an interest in your business entity or your owners |
| l. Franchisor approval of transfer by franchisee | Section 9.1 | Counselor has the right to consent to all transfers (other than a transfer of less than a majority interest in your business entity or your owners) and will consent if Counselor deems transferee qualified and conditions specified in Franchise Agreement are satisfied |
| m. Conditions for franchisor approval of transfer | Sections 9.1, 9.2 | Transferee qualifies; payment of transfer fee; payment of all amounts owing; renovation to then-current System standards; execution of guaranty by buyer's shareholders or owners |
| n. Franchisor's right of | Section 9.6 | Counselor has the right of first |
| first refusal to acquire | refusal to match any offer for your | |
| franchisee's business | Business | |
| o. Franchisor's option to | Not applicable | Not applicable |
| purchase franchisee's | ||
| business | ||
| p. Death or disability of franchisee | Section 9.3 | Decedent's (or disabled person's) executor, heir, successor or legal representative must apply for Counselor's consent to transfer within 60 days after death or incapacity, and comply with transfer provisions of Franchise Agreement |
| q. Non-competition covenants during the term of the franchise | Section 7.2 | No direct or indirect involvement in any different or competing real estate brokerage service business within 50 miles of Office; no solicitation of agents, employees or independent |
| Provision | Section(s) in Franchise or Other Agreement | Summary contractors of Counselor or any of Counselor's franchisees |
| r. Non-competition covenants after the franchise is terminated or expires | 7.2 | No solicitation of agents, employees or independent contractors of Counselor or any of Counselor's franchisees for 24- months post-termination |
| s. Modification of the agreement | Section 13.2 | No modifications generally but Franchise Policy Guidelines and licensed Marks subject to change by Counselor |
| t. Integration/merger clause | Section 13.1 | Only the terms of the Franchise Agreement are binding on Counselor |
| u. Dispute resolution by arbitration or mediation | Section 10.1 | Most disputes are resolved by individual binding arbitration conducted in Minneapolis, Minnesota |
| v. Choice of forum | Not applicable | Not applicable |
| w. Choice of law | Section 13.2 | Minnesota law applies (except Minnesota Franchises Law applies only to franchisees whose principal place of business is located in Minnesota and to whom Minnesota Franchise Act applies by its own terms) |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 25–29)
What This Means (2025 FDD)
According to the 2025 Counselor Realty Franchise Disclosure Document, the Franchise Agreement is generally governed by Minnesota law. Specifically, Section 13.2 of the Franchise Agreement states that Minnesota law applies to the agreement. However, there is an exception: the Minnesota Franchise Law applies only to franchisees whose principal place of business is located in Minnesota and to whom the Minnesota Franchise Act applies by its own terms. This means that if a Counselor Realty franchisee operates primarily outside of Minnesota, the Minnesota Franchise Law might not be the governing law.
This choice of law provision is important for prospective franchisees because it dictates which state's legal system will be used to interpret and enforce the Franchise Agreement. Franchisees should be aware that even though the agreement specifies Minnesota law, the Minnesota Franchise Act may or may not apply depending on where their principal place of business is located. This could affect their rights and obligations under the agreement.
It is common for franchise agreements to include a choice of law provision, which specifies which state's laws will govern the agreement. This helps to provide clarity and predictability in the event of a dispute. However, franchisees should carefully review the choice of law provision to understand which state's laws will apply to their agreement and how this might affect their rights and obligations. Given the exception for the Minnesota Franchise Act, prospective Counselor Realty franchisees should seek legal counsel to determine the precise implications of this clause for their specific situation and location.