AntiWaiver Provisions in Franchisees State Franchise Statutes Trumped by Texas Law

The federal court for the Western District of Texas dismissed all of the Curves franchisees’ causes of action based on the laws of their home states because Texas law, the law of the franchisor’s location and the law set forth in the choice of law clauses, applies. In this consolidated action, several Curves franchisees located across the United States asserted twenty-six non-Texas statutory claims based on the franchise act and consumer protection laws in the states where the franchisees are located. Franchisees argued that the anti-waiver provisions found in the laws of eleven states that contain franchises owned and/or previously owned by plaintiffs required the application of the laws where the franchisees are located. The federal court rejected this argument because the laws of the franchisees’ home states are inapplicable based on the application of the “most significant relationship” set forth in the Restatement (Second) of Conflicts of Law. Because Texas had the most significant relationship to the franchisees’ claims, the laws of the franchisees’ home states, including those states with anti-waiver provisions, were inapplicable. Thus, all of the franchisees’ twenty-six causes of action based on their home state laws were dismissed. Momentum Marketing Sales & Services, Inc. v. Curves International, Inc., Bus. Franchise Guide (CCH) ¶ 14,047 (W.D. Tex. Dec. 17, 2008).