Under which state's laws will the Gokhale Method Franchise Agreement be construed?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
| This FRANCHISE AGREEMENT ("Agreement") | is made effective | , 20, (the "Effective Date") |
|---|---|---|
| by and between Gokhale Method Institute, Inc., a corpo | oration formed under | California law, with its principal |
| business address at 3790 El Camino Real #1033, Pal- | o Alto, CA 94306 (r | eferred to in this Agreement as |
| "Franchisor," "we", "us" or "our"), and | , a | with its principa |
| business address at | (referred to in this A | greement as "Franchisee", "you,' |
| "your" or "owner"). | - |
ADDENDUM TO THE GOKHALE METHOD INSTITUTE, INC. FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF CALIFORNIA
REGISTRATION OF THIS FRANCHISE DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION, OR ENDORSEMENT BY THE COMMISSIONER OF THE DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION.
The California Department of Financial Protection and Innovation requires that certain provisions contained in franchise documents be amended to be consistent with California law, including the California Franchise Investment Law, CAL.
CORP.
CODE Section 3100 et seq., and the California Franchise Relations Act, CAL.
BUS.
PROF.
CODE Section 20000 et seq.
To the extent that the disclosure document and/or Franchise Agreement contain provisions that are inconsistent with the following, such provisions are hereby amended:
- A.
Item 17 of the disclosure document is supplemented by the following language:
- a.
California Business and Professions Code Sections 20000 through 20043 provide rights to the franchisee concerning termination, transfer, or non-renewal of a franchise.
If the franchise agreement contains a provision that is inconsistent with the law, the law will control.
- e.
The Franchise Agreement requires the parties to try to settle disputes in mediation administered by the American Arbitration Association ("AAA") under its Commercial Mediation Procedures.
If not resolved by mediation, the Franchise Agreement requires binding arbitration.
The arbitration will occur at Palo Alto, California with the costs being borne by the parties equally.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the Franchise Agreement is made effective by and between Gokhale Method Institute, Inc., a corporation formed under California law. This indicates that the agreement is likely to be construed under California law, as Gokhale Method is incorporated there. The principal business address of Gokhale Method is also located in Palo Alto, California.
Furthermore, the FDD includes an addendum specifically for the state of California, which amends certain provisions of the franchise documents to align with California law, including the California Franchise Investment Law and the California Franchise Relations Act. This addendum reinforces the importance of California law in governing the franchise relationship, particularly concerning termination, transfer, or non-renewal of the franchise.
Additionally, the addendum addresses specific clauses within the Franchise Agreement that may be impacted by California law, such as those related to termination upon bankruptcy, covenants not to compete, liquidated damages, and dispute resolution through mediation and arbitration. The arbitration will occur at Palo Alto, California with the costs being borne by the parties equally. These provisions highlight that California law takes precedence over any conflicting terms in the agreement, ensuring franchisees' rights are protected under California statutes.