What is the required action for both the Franchisor and Franchisee regarding the Illinois Addendum to the Alloy Franchise Agreement?

According to Alloy's 2025 Franchise Disclosure Document, both the franchisor, Alloy Personal Training, LLC, and the franchisee are required to acknowledge that they have read and understood the Illinois Addendum to the Franchise Agreement and consent to be bound by all of its terms. This acknowledgment signifies that both parties are aware of and agree to the specific modifications and additions to the standard Franchise Agreement that are necessary to comply with Illinois state laws and regulations. This ensures that the franchisee's rights under Illinois law are protected.

This requirement is important because Illinois has specific statutes and regulations that govern franchise relationships, and the addendum is designed to ensure compliance with these laws. The Illinois Addendum addresses issues such as financial assurances required by the Illinois Attorney General's Office due to Alloy's financial condition, choice of law, and provisions that might conflict with the Illinois Franchise Disclosure Act. By acknowledging and consenting to the addendum, both Alloy and the franchisee demonstrate their understanding of these specific legal requirements and their agreement to abide by them.

The addendum modifies certain sections of the standard Franchise Agreement to align with Illinois law. For example, it may specify that any cause of action related to the agreement must be brought in Illinois federal or state court. It also clarifies that certain provisions in the standard agreement that might force a franchisee to waive rights under the Illinois Franchise Disclosure Act are unenforceable. The surety bond, required due to Alloy's financial condition, is also addressed within the Illinois Addendum.

In practical terms, this means that a prospective Alloy franchisee in Illinois should carefully review the Illinois Addendum along with the standard Franchise Agreement. They should ensure they understand all the modifications and additions, as these will govern their franchise relationship within the state. By signing the acknowledgment, the franchisee confirms they are aware of their rights and obligations under Illinois law, and Alloy demonstrates its commitment to complying with those laws.