Does the Illinois Franchise Disclosure Act allow for the arbitration of claims for an Alloy franchise pursuant to Title 9 of the United States Code?

According to Alloy's 2025 Franchise Disclosure Document, the Illinois Franchise Disclosure Act does allow for the arbitration of claims pursuant to Title 9 of the United States Code. Specifically, Section 41 of the Illinois Franchise Disclosure Act states that while any provision that seeks to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is void, this does not prevent the arbitration of any claim under Title 9 of the U.S. Code. This means that Alloy franchisees in Illinois are not prevented from arbitrating claims under the federal arbitration laws, even though they cannot waive their rights under Illinois franchise law.

This provision is included in the Illinois Addendum to the Franchise Agreement, indicating that it is a specific consideration for franchisees operating in Illinois. The addendum also clarifies that Illinois law governs the Franchise Agreement, but arbitration can still take place outside of Illinois, further emphasizing the allowance for arbitration under Title 9.

For a prospective Alloy franchisee in Illinois, this means that while they retain their rights under Illinois franchise law and cannot be forced to waive them, they can still agree to arbitrate disputes with Alloy, and such arbitration can be governed by the Federal Arbitration Act. This provides a potential alternative to litigation in state or federal court, which may be faster or more cost-effective depending on the specific circumstances of the dispute.