Does the Aw agreement specify that the franchisee cannot sue Aw in any court other than those in Illinois?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
18.4 Governing Law/Consent to Jurisdiction. All matters relating to arbitration shall be governed by the Federal Arbitration Act (9 U.S.C. Section 1 et. seq.). Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et. seq.) or other federal law, this Agreement and franchise shall be governed by the laws of the State
of Illinois except to the extent that the law of the state in which your Papa Ray's Pizza Restaurant is located requires that it be governed by the laws of such state. To the extent any claim shall not be arbitrated as provided in Section 18.3, you irrevocably submit to the exclusive jurisdiction of any state or federal court of jurisdiction located in the State of Illinois and you (and your Owners) irrevocably submit to the exclusive jurisdiction of such court and waive any objection you may have to either the jurisdiction or venue of such court. You agree to the exclusive jurisdiction of such courts and agree not to sue us regarding any matter relating in any way to this Agreement except in such courts.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the franchise agreement initially mandates that franchisees can only sue Aw in Illinois courts. Specifically, franchisees must irrevocably submit to the exclusive jurisdiction of state or federal courts in Illinois for any claims not subject to arbitration. The franchisee also agrees not to initiate lawsuits against Aw related to the agreement outside of these specified Illinois courts. This clause appears in Section 18.4 of the franchise agreement, which covers governing law and consent to jurisdiction.
However, the addendum for Illinois franchisees modifies this provision. For any cause of action enforceable in Illinois under Section 4 of the Illinois Franchise Disclosure Act, the original clause is voided. Furthermore, claims arising under the Illinois Franchise Disclosure Act of 1987 must be brought in a court within Illinois that has the appropriate subject matter and personal jurisdiction. This means that while Aw generally prefers litigation to occur in Illinois, franchisees operating in Illinois have the right to pursue claims under the Illinois Franchise Disclosure Act in Illinois courts.
For franchisees operating outside of Illinois, the initial clause requiring disputes to be settled in Illinois courts would likely apply, except where the law of the state in which the Papa Ray's Pizza Restaurant is located requires that it be governed by the laws of such state. This could create a situation where franchisees in different states have different legal options and venues available to them when resolving disputes with Aw.