What is the purpose of the Addendum to the Alloy Franchise Agreement required for Illinois franchisees?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
stionnaire, 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. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended as follows:
- The following sentence is hereby added to the end of Section 9.A, Initial Franchise Fee:
Due to the financial condition of the Franchisor, the Illinois Attorney General's Office has required a financial assurance. Therefore, we have posted a surety bond which is on file with the Illinois Attorney General's Office. A copy of the surety bond is attached as an exhibit to the Illinois addenda pages.
- The first sentence of Section 15.I is deleted in its entirety, and the following is substituted:
Subject to Section 12.A, any cause of action, claim, suit or demand allegedly arising from or related to the terms of this Agreement or the relationship of the parties must be brought in the Illinois federal or state court for the Designated Area in which you are located.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the Addendum to the Franchise Agreement for Illinois franchisees is to ensure compliance with Illinois statutes and regulations. This addendum modifies specific sections of the standard Franchise Agreement to align with Illinois law.
Specifically, the addendum addresses the initial franchise fee, stipulating that due to Alloy's financial condition, the Illinois Attorney General's Office requires a financial assurance in the form of a surety bond, which is on file with the Attorney General's Office and attached as an exhibit. The addendum also modifies the section regarding legal claims, requiring that any legal action related to the agreement or the relationship between the parties must be brought in an Illinois federal or state court within the franchisee's designated area, subject to certain conditions.
Furthermore, the addendum ensures that franchisees cannot waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law. It also states that any disclaimers or statements signed by the franchisee cannot be interpreted as waiving claims of fraud or reliance on information provided by Alloy. These provisions are designed to protect the franchisee's rights under Illinois law and prevent them from inadvertently relinquishing those rights.
In summary, the Illinois addendum serves to protect franchisees by ensuring adherence to Illinois-specific regulations, particularly concerning financial assurances, legal venues, and the waiver of rights, providing a more secure and legally sound franchise relationship within the state.