What state's law applies generally to the Face Foundrie Area Development Agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section(s) in | Summary | |
|---|---|---|---|
| Area Development Agreement | rights or obligations under the Area Development Agreement, or any material asset of your business, without our prior written consent, which shall be subject to all of the conditions and requirements for transfers set forth in the Franchise Agreement executed simultaneously with the Area Development Agreement that we deem applicable to a proposed transfer under the Area Development Agreement. | ||
| (l) Franchisor approval | Section 7.2 | We have the right to approve transfers. | |
| of transfer by area | |||
| developer | |||
| (m) Conditions for franchisor’s approval of transfer | Sections 7.2 and 7.3 | Unless waived, a transfer of the Area Development Agreement is conditioned on, among other factors, the requirement that the proposed transfer of the Area Development Agreement be made in conjunction with a simultaneous transfer of all existing Franchise Agreements to the same approved transferee. Additionally, your first Facial Bar under your first Franchise Agreement must be open and operating. | |
| (n) Franchisor’s right of | Not Applicable | ||
| first refusal to acquire | |||
| area developer’s | |||
| business | |||
| (o) Franchisor’s option to | Not Applicable | ||
| purchase area | |||
| developer’s business | |||
| (p) Death or disability of area developer | Section 5.2 | In the event your Operating Partner dies or becomes incapacitated, you must designate a new Operating Partner that owns at least a 20% ownership interest in you, subject to our approval. | |
| (q) Non-competition covenants during the term of the franchise | Section 8.2 | No direct or indirect involvement in competitive business. | |
| (r) Non-competition covenants after the franchise is terminated or expires | Section 8.3 | For two years, no involvement in competitive business located within a 10-mile radius of any Facial Bar. | |
| Provision | Section(s) in Area Development Agreement | Summary | |
| (s) Modification of the agreement | Section 15 | Except for those permitted to be made unilaterally by us hereunder, no amendment, change, or variance from the Area Development Agreement will be binding on either party unless mutually agreed to by the parties and executed by their authorized officers or agents in writing. | |
| (t) Integration/merger clause | Section 15 | Only the terms of the Area Development Agreement and other related written agreements are binding (subject to applicable state law). Any representations or promises outside of the Disclosure Document and Area Development Agreement may not be enforceable. No claim made in any franchise agreement is intended to disclaim the representations made in this Franchise Disclosure Document. | |
| (u) Dispute resolution by | Sections 16.3 and 16.4 | Except for certain claims, all disputes must be | |
| arbitration or | mediated, and if not settled by mediation, are then | ||
| mediation | subject to arbitration. | ||
| (v) Choice of forum | Section 16.5 | Litigation must be held in the federal or state court for the district where our principal executive office is located (subject to state law). Mediation must occur in a metropolitan area within 20 miles of our principal executive office and arbitration must occur in the office of the American Arbitration Association closest to our principal executive office. | |
| (w) Choice of law | Section 16.1 | Minnesota law applies generally, provided that the Minnesota Franchise Act and other franchise- specific laws and regulations of the State of Minnesota generally do not apply to Facial Bars located outside of Minnesota. (Subject to applicable state law.) |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)
What This Means (2025 FDD)
According to the 2025 Face Foundrie Franchise Disclosure Document, Minnesota law generally applies to the Area Development Agreement. However, this is subject to applicable state law and with the condition that the Minnesota Franchise Act and other franchise-specific laws and regulations of the State of Minnesota generally do not apply to Face Foundrie Facial Bars located outside of Minnesota. This means that while the agreement itself is typically interpreted under Minnesota law, any specific franchise laws in the state where the Face Foundrie location operates will take precedence.
This clause is important for prospective franchisees because it clarifies which state's laws will govern the agreement, but also highlights that local franchise laws where the business operates can override the general choice of law. This ensures that franchisees are protected by the specific regulations in their state, which may offer additional rights or protections beyond those provided by Minnesota law.
For example, certain states have franchise relationship laws that dictate how a franchise can be terminated or renewed, regardless of what the franchise agreement states. Therefore, a Face Foundrie franchisee should always consult with a legal professional in their own state to understand how local laws might affect their rights and obligations under the Area Development Agreement and Franchise Agreement.
It is also worth noting that the FDD includes state-specific addenda for certain states like California, Maryland, and North Dakota, which further modify the general terms of the agreement to comply with local laws. These addenda can include provisions related to dispute resolution, waivers, and other important aspects of the franchise relationship.