Which state's laws govern the Moes Southwest Grill franchise agreement?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
Governing Law.
This Guaranty is to be construed under and governed by the law of the State of Georgia without regard to Georgia, or any other, choice of law or conflicts of law principles.
If any provision of this Guaranty would not be enforceable under the laws of Georgia, and if the business franchised under the Franchise Agreement is located outside of Georgia and the provision would be enforceable under the laws of the state in which the franchised business is located, then that provision, and only that provision, will be interpreted and construed under the laws of that state.
Nothing in this Guaranty is intended to invoke the application of any franchise, business opportunity, antitrust, "implied covenant," unfair competition, fiduciary, or other doctrine of law of Georgia or any other state.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, the franchise agreement is generally governed by the laws of the State of Georgia. Specifically, the Guaranty agreement associated with the franchise is to be construed under and governed by Georgia law, without regard to Georgia's or any other jurisdiction's choice of law principles. This means that in most situations, Georgia law will dictate how the agreement is interpreted and enforced.
However, there are exceptions to this rule. If a franchised business is located outside of Georgia and a provision within the Guaranty would not be enforceable under Georgia law but would be enforceable under the laws of the state where the business is located, then the laws of that state will govern that specific provision. This ensures that certain aspects of the agreement comply with local laws and regulations, providing some protection to franchisees operating in different states.
It's also important to note that certain states, such as Illinois, Indiana, North Dakota, California and Rhode Island, have specific addenda that may supersede the governing law provisions of the standard franchise agreement to protect franchisees under their local franchise laws. For example, California and Rhode Island law will control if the Franchise Agreement contains a provision that is inconsistent with the law. Similarly, Indiana law supersedes any provisions of the Franchise Agreement and any other agreements, or Georgia law, if these provisions are in conflict with Indiana law. Prospective franchisees should carefully review any state-specific addenda to understand how local laws may affect the interpretation and enforcement of their franchise agreement.