If there are inconsistencies between the 360 Painting Franchise Agreement and the Illinois law modifications, which document takes precedence?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
The Illinois Franchise Disclosure Act requires that certain provisions contained in franchise documents, including the Franchise Agreement, be amended to be consistent with Illinois law. Therefore, to the extent that the Franchise Agreement contains provisions that are inconsistent with the following, the modification set forth below shall be controlling:
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- Illinois law governs the agreements between the parties to this franchise.
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- Section 4 of the Illinois Franchise Disclosure Act provides that any provision in a franchise agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a franchise agreement may provide for arbitration outside of Illinois.
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- Section 41 of the Illinois Franchise Disclosure Act provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
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- Your rights upon termination and non-renewal of a franchise agreement are set forth in Sections 19 and 20 of the Illinois Franchise Disclosure Act.
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- THE FRANCHISOR MAY SUBCONTRACT PAINTING, DECORATING AND WALL FINISHING SERVICES WITHIN YOUR "PROTECTED" TERRITORY TO OTHER (INCLUDING TO OTHER FRANCHISEES) WITH NO COMPENSATION TO YOU.
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- Sections 4.1 and 4.7 of the Franchise Agreement are modified to reflect that Franchisor must defer the payment of all initial fees payable to Franchisor until Franchisor has fulfilled all of its material preopening obligations to Franchisee and Franchisee has commenced doing business pursuant to the Franchise Agreement. The Illinois Attorney General's Office imposed this deferral requirement due to Franchisor's financial condition. Accordingly, notwithstanding anything to the contrary contained in the Franchise Agreement, Franchisee must pay Franchisor the Franchise Fee and initial technology fee payable to Franchisor at the time Franchisor has fulfilled all of its material pre-opening obligations to Franchisee and Franchisee has commenced doing business pursuant to the Franchise Agreement.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 FDD, for 360 Painting franchisees in Illinois, the Illinois Franchise Disclosure Act takes precedence over the standard Franchise Agreement. The Illinois Law Modification explicitly states that if any provisions in the Franchise Agreement are inconsistent with Illinois law, the modifications set forth in the addendum will be controlling. This ensures that the franchise agreement adheres to Illinois state law.
Several specific areas are highlighted where Illinois law takes precedence. These include the governing law of the agreement, jurisdiction and venue for disputes, stipulations binding the franchisee to waive compliance with Illinois law, and the franchisee's rights upon termination or non-renewal. The 360 Painting FDD also specifies that the franchisor may subcontract painting services within the franchisee's protected territory without compensation to the franchisee.
Furthermore, the 360 Painting FDD notes that Sections 4.1 and 4.7 of the Franchise Agreement are modified to reflect that the franchisor must defer the payment of all initial fees until the franchisor has fulfilled all of its material preopening obligations to the franchisee and the franchisee has commenced business. This deferral was imposed by the Illinois Attorney General's Office due to the franchisor's financial condition. Therefore, franchisees in Illinois should be aware that the Illinois Franchise Disclosure Act and its specific modifications will supersede conflicting terms in the standard 360 Painting Franchise Agreement.