Which state's laws govern the Fat Shack agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
/Waiver of Jury Trial
The United States Federal Arbitration Act shall govern all questions about the enforceability of Sections 22.1 and 22.2 and the confirmation of any arbitration awards pursuant to such procedures, and no arbitration issues are to be resolved pursuant to any other statutes, regulations or common law. Otherwise, except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et seq.) or other United States federal law, this Agreement shall be interpreted under the laws of the State of Colorado and any dispute between the parties shall be governed by and determined in accordance with the internal substantive laws, and not the laws of conflict, of the State of Colorado, which laws shall prevail in the event of any conflict of law. Notwithstanding the foregoing, the parties agree that the Colorado Consumer Protection Act (COLO. REV. STAT. ANN. Sections 6-1-101, et seq.) shall not apply to this Agreement or any disputes between the parties. Franchisee and FSI have negotiated regarding a forum in which to resolve any disputes that arise between them and have agreed to select a forum in order to promote stability in their relationship.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the franchise agreement is generally governed by Colorado law. Specifically, the document states that, except to the extent governed by the United States Trademark Act or other federal law, the agreement will be interpreted under the laws of Colorado. Any disputes will be governed by and determined in accordance with the internal substantive laws of Colorado, not its conflict of law rules.
However, there are exceptions to this general rule. Disputes related to a violation of the Indiana Franchises Act or the Indiana Deceptive Franchise Practices Act will be governed by those Indiana laws, to the extent governed by federal law. Additionally, if Fat Shack brings a legal proceeding not subject to mandatory arbitration, it may do so in any court of competent jurisdiction where the Fat Shack Restaurant is located or where the franchisee resides or owns assets.
This means that while Colorado law typically applies, franchisees in other states may find that certain aspects of their agreement are governed by their local state laws, especially concerning franchise-specific regulations. Franchisees should be aware of both Colorado law and the laws of their own state to fully understand their rights and obligations under the Fat Shack franchise agreement.