For Aplus franchises in Illinois, is a provision designating jurisdiction and venue outside of Illinois enforceable?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Section 705/4 of the Illinois Franchise Disclosure Act of 1987 (the "Illinois Franchise Disclosure Act") provides that any provision in the Franchise Agreement and Development Agreement that designates venue outside of Illinois is void with respect to any cause of action that is otherwise enforceable in Illinois; however, the Agreement may provide for arbitration in a forum outside of Illinois.
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.
Illinois law shall apply to and govern the Franchise Agreement and Development Agreement.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, any provision in the franchise agreement that designates jurisdiction and venue in a forum outside of Illinois is void, according to Section 4 of the Illinois Franchise Disclosure Act. This means that Aplus franchisees in Illinois cannot be forced to litigate disputes in another state. However, the agreement may still provide for arbitration outside of Illinois.
This protection is reinforced by an amendment required by the Illinois Attorney General's Office, ensuring consistency with Illinois law. This amendment specifically states that any provision in the Franchise Agreement that designates venue outside of Illinois is void with respect to any cause of action that is otherwise enforceable in Illinois.
Furthermore, the FDD states that Illinois law shall apply to and govern the Franchise Agreement and Development Agreement. This means that Illinois state laws will be used to interpret the franchise agreement. This provision is designed to protect Aplus franchisees in Illinois and ensure that they are not subject to unfair or unfavorable legal proceedings in other jurisdictions.
Prospective Aplus franchisees in Illinois should be aware of these protections and consult with an attorney to fully understand their rights under Illinois law. It is important to note that while venue provisions are void, arbitration may still take place outside of Illinois, which could still present logistical challenges for franchisees.