Does the Rhode Island Franchise Investment Act permit Mrcool to include a provision in its Franchise Agreement that restricts jurisdiction or venue to a forum outside of Rhode Island?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 17, "Renewal, Termination, Transfer and Dispute Resolution," Item 17 is supplemented by the addition of the following:
- A. The Rhode Island Franchise Investment Act, R.I. Gen. Law Ch. 395 Sec. 19-28.1-14 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 the Rhode Island Franchise Investment Act.
- B. Any general release as a condition of renewal, termination or transfer will be void with respect to claims under the Rhode Island Franchise Investment Act.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the Rhode Island Franchise Investment Act addresses the inclusion of provisions in the Franchise Agreement that restrict jurisdiction or venue to a forum outside of Rhode Island. Specifically, the Rhode Island Franchise Investment Act states that any provision in a Franchise Agreement restricting jurisdiction or venue to a forum outside of Rhode Island, or requiring the application of the laws of another state, is void with respect to a claim otherwise enforceable under the Rhode Island Franchise Investment Act. This amendment supplements Item 17 of the FDD, which covers "Renewal, Termination, Transfer and Dispute Resolution."
For a prospective Mrcool franchisee in Rhode Island, this means that Mrcool cannot enforce a clause in the franchise agreement that mandates disputes be resolved in a location outside of Rhode Island if the claim is enforceable under the Rhode Island Franchise Investment Act. This protects the franchisee's right to pursue legal claims within their own state under the protections of Rhode Island law.
Additionally, any general release required as a condition of renewal, termination, or transfer of the franchise will be void with respect to claims made under the Rhode Island Franchise Investment Act. This ensures that franchisees cannot be forced to waive their rights under the Act as a condition of continuing or ending the franchise relationship.