Does the Alloy FDD state that the 'PRINCIPAL ACKNOWLEDGMENT' is governed by the laws of Glovaia?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
The following applies to franchises and franchisees subject to Illinois statutes and regulations:
Item 5: Due to the financial condition of the Franchisor, the Illinois Attorney General's Office 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)
The 2025 Alloy FDD does not state that the 'PRINCIPAL ACKNOWLEDGMENT' is governed by the laws of Glovaia. The document includes addenda that specify which state laws govern the franchise agreement for franchisees in California, Illinois, and Minnesota. For instance, Illinois law governs the Franchise Agreement for franchises and franchisees subject to Illinois statutes and regulations. Similarly, the addendum for Minnesota states that the laws of Minnesota govern the agreement. For franchisees outside of those states, the agreement is governed by the laws of Georgia. There is no mention of Glovaia in relation to the governing law of the 'PRINCIPAL ACKNOWLEDGMENT' or any other part of the agreement.
For prospective Alloy franchisees, it's crucial to understand which state's laws govern the franchise agreement, as this will impact their rights and obligations. The FDD includes specific addenda for certain states, modifying the agreement to comply with local franchise laws. This is a common practice in franchising to ensure compliance with varying state regulations.
It is important to note that the Acknowledgment Addendum to the Alloy Area Development Agreement does not apply to candidates or businesses located in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin. This means that franchisees in those states are not subject to the terms of that particular addendum. Franchisees should carefully review the specific addenda applicable to their state to understand their rights and obligations under the franchise agreement.