Can an Alloy franchisee waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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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 any provision of the Illinois Franchise Disclosure Act or any other law of the State of Illinois is void. This Section shall not prevent any 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, nor shall it prevent the arbitration of any claim pursuant to the provisions of Title 9 of the United States Code.
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- No disclaimer, questionnaire, clause, or statement signed by a franchisee in connection with the commencement of the franchise relationship shall be construed or interpreted as waiving any claim of fraud in the inducement, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a material inducement to a franchisee's investment. This provision supersedes any other or inconsistent term of any document executed in connection with the franchise.
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 explicitly states that any condition, stipulation, or provision that attempts to bind someone acquiring an Alloy franchise to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is considered void. This protects franchisees by preventing them from unknowingly or unwillingly giving up their rights under Illinois law.
However, this section 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. It also does not prevent the arbitration of any claim pursuant to the provisions of Title 9 of the United States Code. This means that while franchisees cannot waive their rights wholesale, they can still settle disputes or agree to arbitration.
Furthermore, no disclaimer, questionnaire, clause, or statement signed by an Alloy franchisee at the start of the franchise relationship can be interpreted as waiving claims of fraud in the inducement. This includes both common law and statutory claims, or disclaiming reliance on statements or information provided by Alloy or its representatives that were a material inducement to the franchisee's investment. This provision takes precedence over any other conflicting terms in any document related to the franchise, reinforcing the protection against being misled into the investment.