What law governs the Aw Franchise Agreement in Illinois?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
The Rayyan Pizza Franchise LLC Franchise Disclosure Document for use in the State of Illinois is modified in accordance with the following:
Illinois law shall apply to and govern the Franchise Agreement.
In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
Franchisee's rights upon Termination and Non-renewal are set forth in Sections 19 and 20 of the Illinois Franchise Disclosure Act.
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.
Payment of the Initial Franchise Fee will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business. This financial assurance requirement was imposed by the Office of the Illinois Attorney General due to Franchisor's financial condition.
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the Illinois Addendum states that Illinois law governs the Franchise Agreement for franchisees operating in Illinois. This means that the interpretation and enforcement of the agreement will be subject to Illinois state laws.
This addendum also clarifies specific points regarding the application of Illinois law. It states that any provision in the franchise agreement that designates jurisdiction and venue outside of Illinois is void, although the agreement can stipulate that arbitration may occur outside of Illinois. This protects franchisees by ensuring they can pursue legal claims within their home state.
Additionally, the addendum reinforces the Illinois Franchise Disclosure Act, ensuring that franchisees cannot waive compliance with this Act or any other Illinois law. This provision aims to protect franchisees from unknowingly relinquishing their rights under Illinois law. The franchisor is also required to defer the payment of the initial franchise fee until it has fulfilled its initial obligations to the franchisee and the franchisee has started business operations; this requirement was imposed by the Illinois Attorney General due to Aw's financial condition.
These stipulations are designed to provide additional protection to Aw franchisees in Illinois, ensuring that their rights under state law are upheld and that they have appropriate legal recourse within the state.