What is the effect of Section 41 of the Illinois Franchise Disclosure Act on Alloy franchise agreements?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
ffice has required a financial assurance. Therefore, we have posted a surety bond which is on file with the Illinois Attorney General's Office. A copy of the surety bond is attached as an exhibit to the Illinois addenda pages.
Illinois law governs the Franchise Agreement.
In conformance with Section 4 of the Illinois Franchise Disclosure Act, 815 ILCS 705/1-44 (West 2016), 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 to take place outside of Illinois.
Your rights upon termination and non-renewal are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.
In conformance with Section 41 of the Illinois Franchise Disclosure Act, 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.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Section 41 of the Illinois Franchise Disclosure Act has a specific impact on franchise agreements within Illinois. This section stipulates that any condition, stipulation, or provision that attempts to obligate a person acquiring an Alloy franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of the State of Illinois is considered void.
However, there are exceptions to this rule. Section 41 does not prevent a person from entering into a settlement agreement or executing a general release regarding a potential or actual lawsuit filed under any of the provisions of the Illinois Franchise Disclosure Act. Additionally, it does not prevent the arbitration of any claim pursuant to the provisions of Title 9 of the United States Code.
In practical terms, this means that Alloy franchisees in Illinois cannot be forced to waive their rights under Illinois franchise law or any other Illinois law. They retain the right to pursue legal action and are protected from any contractual terms that might otherwise limit their ability to do so. However, franchisees can voluntarily enter into settlement agreements or agree to arbitration, as these are not prohibited by Section 41.