What is Kidokinetics' stance on the enforceability of choice of law provisions within the Franchise Agreement and Supplemental Agreements, despite Rhode Island law?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
10428 West SR 84, an midnight of the fifth business day after the Effective Date. | | I hereby cancel this transact | Franchisee: | | Date: | By: Print Name: Print Name: Its: 1001 |
RHODE ISLAND
§ 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act." The FDD, the Franchise Agreement, and the Supplemental Agreements are amended accordingly
to the extent required by law.
The above language has been included in this FDD as a condition to registration. The Franchisor and the Franchisee do not agree with the above language and believe that each of the provisions of the Franchise Agreement and the Supplemental Agreements, including all choice of law provisions, are fully enforceable.
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, both Kidokinetics and the franchisee do not agree with Rhode Island law regarding choice of law provisions. While the FDD, Franchise Agreement, and Supplemental Agreements are amended to comply with § 19-28.1-14 of the Rhode Island Franchise Investment Act, which voids provisions restricting jurisdiction or requiring the application of other states' laws, Kidokinetics believes that all provisions, including choice of law, are fully enforceable.
Kidokinetics intends to fully enforce all provisions of the Franchise Agreement, Supplemental Agreements, and other signed documents. This includes venue, choice-of-law, arbitration provisions, and other dispute resolution mechanisms. Kidokinetics plans to rely on federal pre-emption under the Federal Arbitration Act to support its position.
For a prospective franchisee, this means that while Rhode Island law may offer some protection against out-of-state jurisdiction or choice of law, Kidokinetics intends to pursue enforcement of its original agreement terms to the fullest extent possible. A franchisee in Rhode Island should be aware of this potential conflict and seek legal counsel to understand their rights and obligations under both the franchise agreement and Rhode Island law.