Does the Alloy franchise agreement address rights under the Federal Arbitration Act?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Applicable Law and Waiver. Subject to our rights under federal trademark laws and the parties' rights under the Federal Arbitration Act in accordance with Section 15.01 of this Agreement, the parties' rights under this Agreement, and the relationship between the parties is governed by, and will be interpreted in accordance with, the laws (statutory and otherwise) of Illinois.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the franchise agreement does address rights under the Federal Arbitration Act, specifically for franchises sold in Illinois. The Illinois Addendum modifies the Area Development Agreement to include a clause stating that the parties' rights under the agreement are subject to the Federal Arbitration Act, in accordance with Section 15.01 of the agreement. This means that disputes arising from the franchise relationship in Illinois may be subject to arbitration under federal law.
For prospective Alloy franchisees in Illinois, this addendum ensures that both Alloy and the franchisee retain any rights they have under the Federal Arbitration Act, which governs the enforcement of arbitration agreements. This could impact how disputes are resolved, potentially leading to arbitration rather than litigation in certain situations.
It is important for franchisees to understand how the Federal Arbitration Act may affect their rights and obligations, especially in the context of dispute resolution. Franchisees should consult with legal counsel to fully understand the implications of this clause and how it interacts with other provisions of the franchise agreement.