To what extent is each provision of the Management Recruiters addendum effective in New York?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
nd Item 17(w), titled "Choice of law":
The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York
ADDENDUM TO THE MRI FRANCHISE AGREEMENT REQUIRED BY THE DEPARTMENT OF LAW THE STATE OF NEW YORK
THIS ADDENDUM TO THE FRANCHISE AGREEMENT FOR NEW YORK ("this Addendum") is entered into by and between HQ MRI Corporation., Delaware corporation, with its principal office 111 Springhall Drive, Goose Creek, SC 29445 ("we," "us" or "our") and ("you" or "your"), whose principal business address is . WHEREAS, we and you have entered into a certain Franchise Agreement (the "Franchise Agreement") dated , 23 (the "Effective Date") and desire to amend certain terms of the Franchise Agreement in accordance with the terms and conditions contained in this Addendum.
WHEREAS, you are domiciled in New York and the MRINetwork franchise will be located in New York, and/or any of the offering or sales activity relating to the Franchise Agreement occurred in the State of New York.
NOW THEREFORE, we and you agree that the Franchise Agreement is hereby modified, as follows:
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- In recognition of the requirements of the General Business Law of the State of New York, Article 33, §§ 680 through 695, (the "Act") the Franchise Agreement for MRI is amended asfollows:
This Addendum is intended to modify the Franchise Agreement. In the event of any conflict between a provision of the Franchise Agreement and this Addendum, the provision of this Addendum shall control. All terms which are capitalized in this Addendum and not otherwise defined, will have the meanings given to them in the Franchise Agreement. Except as amended by this Addendum, the Franchise Agreement is unmodified and in full force and effect in accordance with its terms.
The Member is required to sign a general release as a condition of renewal, termination and transfer of the franchise. Such release will exclude claims arising under the General Business Law of the State of New York.
Franchisor will not transfer and assign its rights and obligations under the Franchise Agreement unless the transferee will be able to perform the Franchisor's obligations under the Franchise Agreement, in Franchisor's good faith judgment, so long as it remains subject to the General Business Law of the State of New York.
Member will not be required to indemnify Franchisor for any liability imposed upon Franchisor as a result of Member's reliance upon or use of procedures or products which were required by Franchisor, if such procedures or products were utilized by Member in the manner required by Franchisor.
The Franchise Agreement requires that the franchise be governed by the laws of the state where Franchisor's principal business is then located. Such a requirement will not be considered a waiver of any right conferred upon either you or us by Article 33 of the General Business Law of the State of New York.
The Franchise Agreement requires that any claims or disputes arising out of the franchise relationship be submitted to alternative dispute resolution or filed in the state or federal court of general jurisdiction exclusively in the state where Franchisor's principal business is then located. Provisions in New York state law supersede this, allowing for lawsuits to be filed in New York.
- Each provision of this Addendum will be effective only to the extent that the jurisdictional requirements of the Act are met independent of this Addendum.
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the addendum to the franchise agreement is specifically designed to modify the original agreement in recognition of New York's General Business Law, Article 33, §§ 680 through 695. The provisions of the addendum are effective to the extent that they meet the jurisdictional requirements of this Act, independent of the addendum itself. In case of any conflict between the franchise agreement and the addendum, the terms of the addendum will take precedence.
Several specific modifications are made to the standard Management Recruiters franchise agreement for franchisees in New York. Franchisees are not required to indemnify Management Recruiters for liabilities resulting from reliance on procedures or products mandated by the franchisor, provided they were used as required. The standard agreement's requirement for disputes to be governed by the laws of the state where Management Recruiters' principal business is located does not waive any rights conferred by Article 33 of New York's General Business Law. Additionally, any general release required for renewal, termination, or transfer of the franchise will exclude claims arising under New York's General Business Law.
Further, the addendum modifies specific sections of Item 17 of the franchise agreement, including those related to renewal, extension, transfer, and termination. The summary sections of Item 17(c) regarding renewal or extension and Item 17(m) concerning transfer conditions are amended to ensure that all rights and causes of action available to the franchisee under Article 33 of New York's General Business Law remain in force, satisfying the non-waiver provisions of Sections 687(4) and 687(5). The summary section of Item 17(d), which addresses termination by the franchisee, is replaced to state that the franchisee may terminate the agreement on any grounds available by law. The choice of law and forum provisions in Item 17(v) and 17(w) are also modified to ensure they are not considered a waiver of any rights conferred by Article 33 of New York's General Business Law.
These modifications ensure that Management Recruiters' franchise operations within New York adhere to the state's franchise laws, providing additional protections and rights to franchisees operating in New York. Prospective franchisees should carefully review the addendum and the incorporated modifications to fully understand their rights and obligations under New York law.