Under the Engel & Volkers guarantee, what state's law governs the construction of the guarantee?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
This Guarantee is to be exclusively construed in accordance with and/or governed by the law of the State of New York without recourse to New York (or any other) choice of law or conflicts of law principles. If, however, any provision of this Guarantee would not be enforceable under the laws of New York, and if the business franchised under the Franchise Agreement is located outside of New York and the provision would be enforceable under the laws of the state in which the franchised Business is located, then the provision (and only that provision) will be interpreted and construed under the laws of that state. Nothing in this Guarantee is intended to invoke the application of any franchise, business opportunity, antitrust, "implied covenant", unfair competition, fiduciary or any other doctrine of law of the State of New York or any other state, which would not otherwise apply by its terms jurisdictionally or otherwise but for the within designation of governing law or which, by virtue of its denominated geographic or subject matter scope, would not by its terms otherwise apply.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the construction of the Engel & Volkers guarantee is governed by the laws of New York. Specifically, the guarantee is construed in accordance with the laws of New York, without regard to its choice of law or conflicts of law principles.
However, there is an exception: if any provision of the guarantee is unenforceable under New York law, and the franchised Engel & Volkers business is located outside of New York, the laws of the state where the franchised business is located will govern the interpretation and construction of that specific provision, but only that provision.
This means that while New York law generally applies to the guarantee, franchisees operating outside of New York may find that certain provisions are interpreted under their local state laws if those provisions would not be enforceable under New York law. This ensures that the guarantee remains as enforceable as possible, regardless of the franchisee's location. Engel & Volkers also states that nothing in the guarantee is intended to invoke the application of any franchise, business opportunity, antitrust, "implied covenant", unfair competition, fiduciary or any other doctrine of law of the State of New York or any other state, which would not otherwise apply.