What California laws are recognized in the amendment to the Monicals Pizza Franchise Agreement?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
PMENT AGREEMENT
FOR THE STATE OF CALIFORNIA
| 1. | Development Agreement for Monical Pizza Corporation is amended as follows: | In recognition of the requirements of the California Franchise Investment Law, Cal. Corp. Code | |
|---|---|---|---|
| §§31000-3516 and the California Franchise Relations Act, Cal. Bus. And Prof. Code §§20000-20043, the Area | |||
| and non-renewal. | Section 8 of the Area Development Agreement contains provisions concerning termination If these provisions are inconsistent with California Business and Professions Code Sections 2000 through 20043, California law will control. | ||
| | Section 9.4 of the Area Development Agreement contains a covenant not to compete that | ||
| covenant may not be enforceable under California law. | extends beyond the expiration or termination of the Area Development Agreement; this | ||
| | The Area Development Agreement may require litigation to be conducted in a court located | ||
| action arising under California law. | outside of the State of California. This provision might not be enforceable for any cause of | ||
| | The Area Development Agreement requires application of the laws of a state other than | ||
| California. This provision might not be enforceable under California law. | |||
| Agreement restricting venue to a forum outside of the State of California. | Section 13.7 of the Area Development Agreement requires binding arbitration. arbitration shall occur at the forum indicated in Section 13.7. Prospective developers are encouraged to consult legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of the Area Development | The | |
| 2. | To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of | ||
| said Area Development Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern. | |||
| understands and consents to be bound by all of its terms. | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum, and | ||
| MONICAL PIZZA CORPORATION: | Developer: | ||
| By: | By: | ||
| Title: | Title: |
FOR THE STATE OF HAWAII
| | | between Monical Pizza Corporation and
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, the amendment to the Monicals Pizza Area Development Agreement recognizes the California Franchise Investment Law, specifically Cal. Corp. Code §§31000-3516, and the California Franchise Relations Act, Cal. Bus. And Prof. Code §§20000-20043.
The FDD notes that if any provisions within Section 8 of the Area Development Agreement, which concerns termination and non-renewal, are inconsistent with California Business and Professions Code Sections 2000 through 20043, California law will take precedence. Similarly, a covenant not to compete in Section 9.4 of the Area Development Agreement that extends beyond the agreement's expiration or termination might not be enforceable under California law.
Furthermore, the FDD indicates that any requirement for litigation to occur outside of California or the application of laws from another state might not be enforceable for causes of action arising under California law. It also mentions that prospective developers should seek legal counsel to understand how California and federal laws, including Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act, apply to provisions restricting venue to forums outside California.
In addition, the Monicals Pizza FDD states that California Corporations Code §31512 voids a waiver of rights under the Franchise Investment Law (California Corporations Code §§31000 through 31516), and Business and Professions Code §20010 voids a waiver of rights under the Franchise Relations Act (Business and Professions Code §§20000 through 20043). Also, under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.