What section of the Red Wagon Club franchise agreement specifies the governing law?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
20.G. GOVERNING LAW.
Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et seq.), or other United States federal law, this Agreement, the Franchise and all claims arising from the relationship between Franchisor and Franchisee will be governed by the laws of the State of Florida, without regard to its conflict of laws rules, except that (1) any state law regulating the offer or sale of franchises or governing the relationship of a franchisor and its franchisee will not apply unless its jurisdictional requirements are met independently without reference to this Section, and (2) the enforceability of those provisions of this Agreement which relate to restrictions on Franchisee and its owners' competitive activities will be governed by the laws of the state in which Franchisee's RWC Business is located.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, Section 20.G of the franchise agreement outlines the governing law. It states that, except when superseded by the U.S. Trademark Act or other federal law, the laws of Florida will govern the agreement, franchise, and all claims arising from the relationship between Red Wagon Club and the franchisee. This is without regard to Florida's conflict of laws rules. However, state laws regulating franchise sales or franchisor-franchisee relationships will only apply if their jurisdictional requirements are met independently. Also, the laws of the state where the franchisee's Red Wagon Club Business is located will govern the enforceability of provisions related to restrictions on the franchisee's and its owners' competitive activities.
This means that most legal matters related to the franchise agreement will be interpreted under Florida law, which is where Red Wagon Club is based. However, there are exceptions to this rule. Federal trademark law takes precedence, and any state laws specifically regulating franchises will apply if they independently meet the requirements for jurisdiction. Furthermore, if there are disputes about non-compete clauses, the laws of the state where the franchisee operates will be used to determine the enforceability of those clauses.
For a prospective franchisee, this is important to understand because it clarifies which state's laws will apply in different situations. Franchisees should be aware of Florida law, as it will likely govern most aspects of their agreement with Red Wagon Club. However, they should also be familiar with the franchise laws of their own state and the laws regarding non-compete agreements in their state, as these could also come into play. Consulting with a legal professional who is knowledgeable in franchise law and the laws of both Florida and the franchisee's state is advisable.