Does the Illinois Addendum to the Alloy Franchise Agreement supersede any inconsistent terms in other documents?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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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.
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.
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ADDENDUM TO THE FRANCHISE AGREEMENT REQUIRED FOR ILLINOIS FRANCHISEES
This Addendum pertains to franchises sold in the State of Illinois and is for the purpose of complying with Illinois statutes and regulations.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the Illinois Addendum to the Franchise Agreement does supersede inconsistent terms in other documents under specific circumstances. Specifically, a provision within the Illinois addendum states that "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."
This means that if any document related to the Alloy franchise contains terms that could be interpreted as the franchisee waiving their right to claim fraud, or disclaiming reliance on the franchisor's statements, those terms are superseded by the Illinois Franchise Disclosure Act. This protection applies to claims of fraud in the inducement, whether based on common law or statutory grounds. The Illinois addendum ensures that franchisees cannot be forced to unknowingly give up their rights to pursue legal action if they believe they were fraudulently induced into investing in the franchise.
Furthermore, the Alloy FDD states that any condition, stipulation, or provision that attempts to bind a person acquiring a franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void. This reinforces the protection provided to franchisees under Illinois law and ensures that the franchisor cannot circumvent these protections through contractual clauses. However, this 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, nor shall it 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 have stronger legal protections against potentially misleading or fraudulent practices by the franchisor. It is important for prospective franchisees to carefully review the Illinois Addendum and understand their rights under Illinois law before signing any franchise agreement or related documents. This ensures that they are fully aware of the legal protections available to them and can make informed decisions about their investment.