In Illinois, can an Alloy franchisee enter into a settlement agreement regarding a lawsuit filed under the Illinois Franchise Disclosure Act?
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.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, an Alloy franchisee in Illinois can enter into a settlement agreement regarding a lawsuit filed under the Illinois Franchise Disclosure Act. This is explicitly permitted under Illinois law, as stated in the FDD.
Specifically, Section 41 of the Illinois Franchise Disclosure Act 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. This also extends to the arbitration of any claim pursuant to the provisions of Title 9 of the United States Code.
This means that Alloy franchisees in Illinois retain the right to settle disputes or pursue arbitration, even if those disputes arise from alleged violations of the Illinois Franchise Disclosure Act. This ensures that franchisees are not forced to waive their rights to legal recourse and can seek resolution through settlement or arbitration. This provision aims to protect franchisees' rights and ensure fair dispute resolution processes within the franchise relationship.