Where must a franchisee sue Aw regarding any matter relating to the Agreement?
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.
18.5 Costs and Attorneys' Fees. If a claim for amounts owed by you to us or our affiliates is asserted in any legal proceeding before an arbitrator, or if we are required to enforce this Agreement in a judicial or arbitration proceeding, we will be entitled to reimbursement of our costs and expenses, including reasonable accounting and legal fees, arbitration administrative charges, arbitrator's compensation, and any other related costs, whether incurred prior to, in preparation for or in contemplation of the filing of any written demand, claim, action, hearing or proceeding to enforce the obligations of this Agreement. If we incur expenses due to your failure to pay when due amounts owing to us; to submit when due any reports, information or supporting records; or any other failure to comply with this Agreement, you shall reimburse us for any such costs and expenses which we incur including but not limited to attorneys' and accounting fees and collection agency fees.
18.6. WAIVER OF JURY TRIAL. EACH PARTY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY, BROUGHT BY EITHER PARTY.
- 18.7. Limitation of Damages.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, a franchisee must generally sue Aw in Illinois, specifically in a state or federal court located in the State of Illinois. The franchisee irrevocably submits to the exclusive jurisdiction of these courts and waives any objections to the jurisdiction or venue. This means that any legal disputes arising from the franchise agreement must be pursued in Illinois courts, regardless of where the franchisee's Papa Ray's Pizza Restaurant is located.
However, there is an exception to this rule. If the law of the state in which the Papa Ray's Pizza Restaurant is located requires that the franchise agreement be governed by the laws of that state, then that state's laws will apply. Additionally, claims arising under the Illinois Franchise Disclosure Act of 1987 must be brought in a court in the state of Illinois with subject matter and personal jurisdiction in the particular matter, as stated in an amendment to Section 18.4 of the Franchise Agreement.
This requirement to litigate in Illinois could pose a significant burden for franchisees located outside of Illinois, as they would need to travel to Illinois for court proceedings and potentially hire legal counsel familiar with Illinois law. Prospective franchisees should carefully consider this provision and consult with an attorney to understand the implications of this forum selection clause. It is relatively common for franchise agreements to specify a particular jurisdiction for dispute resolution, but franchisees should be aware of the potential costs and inconveniences associated with this requirement.