What state's laws govern matters pertaining to Face Foundrie franchise registration, employment, covenants not to compete, and other local concerns in South Dakota?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
The laws of the State of South Dakota will govern matters pertaining to franchise registration, employment, covenants not to compete, and other matters of local concern; but as to contractual and all other matters, the Franchise Agreement will be subject to the applications, construction, enforcement and interpretation under the governing law of Minnesota.
Any provisions in the Franchise Agreement restricting jurisdiction or venue to a forum outside of the State of South Dakota or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under the South Dakota Franchise Act.
Any provision that provides that the parties waive their right to claim punitive, exemplary, incidental, indirect, special or consequential damages may not be enforceable under South Dakota 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 Face Foundrie's 2025 Franchise Disclosure Document, the laws of South Dakota govern specific aspects of the franchise within that state. This includes franchise registration, employment matters, and the enforceability of covenants not to compete. This means that Face Foundrie franchisees operating in South Dakota will find that local laws dictate the rules regarding these specific areas. However, the Franchise Agreement itself is subject to the laws of Minnesota regarding contractual and other matters.
This distinction is important for prospective franchisees to understand. While South Dakota law protects franchisees on issues such as franchise registration and non-compete agreements, Minnesota law dictates the interpretation and enforcement of the Franchise Agreement. This dual governance could lead to complexities in legal disputes, as different states' laws may apply to different aspects of the franchise relationship.
Furthermore, any provision in the Franchise Agreement that restricts jurisdiction or venue to a forum outside of South Dakota, or requires the application of another state's laws, is void with respect to claims enforceable under the South Dakota Franchise Act. Additionally, any provision that waives the right to claim punitive, exemplary, incidental, indirect, special, or consequential damages may not be enforceable under South Dakota law. Therefore, Face Foundrie franchisees in South Dakota should be aware of these specific protections afforded to them under state law, regardless of what the Franchise Agreement may state.