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Which state's laws govern the Extreme Art Studio Franchise Agreement, and are there any exceptions?

Extreme_Art_Studio Franchise · 2024 FDD

Answer from 2024 FDD Document

Provision Section in Franchise Agreement and Multi-Franchise Addendum Summary
(t) Integration/merger clause Section 17.14 Only the terms of the Franchise Agreement and
related
documents,
along
with
Franchise
Operations Manual, are binding (subject to state
law). Any representations or promises outside of
this Franchise Disclosure Document or the
Franchise Agreement may not be enforceable.
(u) Dispute resolution by arbitration or mediation Sections 17.5, 17.6 and 17.7 Except for certain claims, all disputes must be mediated and arbitrated in the principal city closest to our principal place of business (currently Eden Prairie, Minnesota), subject to applicable state law.
(v) Choice of forum Section 17.9 Subject to the arbitration requirement, litigation
generally must be commenced in the state or
federal court of general jurisdiction closest to our
then-current principal place of business (currently
in Eden Prairie,, Minnesota), but we and you may
enforce any arbitration orders and awards in the
courts of the state(s) in which you are domiciled or
your Extreme Art Studio Business is located
(subject to applicable state law).
(w) Choice of law Section 17.8 The laws of the state where the Extreme Art Studio
Business is located applies, subject to any contrary
provision
contained
in
the
State
Specific
Addendum (See Exhibit E), subject to applicable
state law.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–46)

What This Means (2024 FDD)

According to Extreme Art Studio's 2024 Franchise Disclosure Document, the laws of the state where the Extreme Art Studio Business is located will govern the Franchise Agreement. This means that if a franchisee operates their Extreme Art Studio in California, California law would generally apply to the agreement.

However, there is an exception to this general rule. The choice of law is subject to any contrary provision contained in the State Specific Addendum, which is included as Exhibit E to the Franchise Agreement. This addendum may outline specific state laws that supersede the general rule.

It is also important to note that all of these stipulations are subject to applicable state law. This means that even the State Specific Addendum must comply with the laws of the state in which the Extreme Art Studio is located. Prospective franchisees should carefully review both Section 17.8 of the Franchise Agreement and Exhibit E, the State Specific Addendum, with legal counsel to fully understand which laws will govern their agreement and any potential conflicts or exceptions.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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