In the event of litigation with Aw, which state's laws and forum apply?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| v. Choice of forum | Section 18.4 | Litigation must be in Illinois; subject to state law. |
| w. Choice of law | Section 18.4 | Law of the state of Illinois applies, except franchise laws only apply if you meet jurisdictional requirements, subject to state law. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–36)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Illinois law governs the Franchise Agreement, and any litigation must occur in Illinois, although this is subject to state law. Specifically, Illinois franchise laws only apply if the franchisee meets the jurisdictional requirements of that state.
This means that if a dispute arises between Aw and a franchisee, the laws of Illinois will generally be used to interpret the Franchise Agreement. However, the application of Illinois franchise laws depends on whether the franchisee meets specific jurisdictional requirements. This could mean having a certain level of business operations or presence within the state.
The requirement to litigate in Illinois could present additional costs and logistical challenges for franchisees located outside of Illinois. Franchisees may need to hire attorneys licensed in Illinois and travel to Illinois for court proceedings. The exception for franchise laws based on jurisdictional requirements provides a limited safeguard, potentially allowing a franchisee to rely on their own state's franchise laws under certain circumstances.
Prospective franchisees should seek legal counsel to understand the implications of these provisions, particularly regarding jurisdiction and the potential costs associated with litigating in Illinois. It is important to determine whether they meet the jurisdictional requirements to ensure they can benefit from Illinois franchise laws, or if their own state's laws might apply.