To what jurisdiction does an Aw franchisee irrevocably submit if a claim is not arbitrated?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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, if a claim is not arbitrated as per section 18.3, the franchisee irrevocably submits to the exclusive jurisdiction of any state or federal court located in the State of Illinois. This submission extends to the franchisee and their owners, who also waive any objections to the jurisdiction or venue of such courts. Furthermore, the franchisee agrees not to sue Aw regarding any matter related to the Franchise Agreement except in these specified courts.
This clause means that if a dispute arises that is not subject to arbitration, an Aw franchisee must pursue legal action in Illinois, regardless of where their franchise is located. This could increase costs for franchisees located outside of Illinois, as they would need to travel to Illinois for court proceedings and potentially hire Illinois-based legal counsel.
However, there is an exception for claims arising under the Illinois Franchise Disclosure Act of 1987, which must be brought in a court within Illinois that has the appropriate subject matter and personal jurisdiction. Additionally, an addendum for the state of Illinois modifies the Franchise Disclosure Document, stating that Illinois law shall apply to and govern the Franchise Agreement.
Prospective franchisees should carefully consider the implications of this jurisdiction clause, especially if they are located outside of Illinois. They should consult with a legal professional to understand their rights and obligations under the Franchise Agreement and the potential costs associated with litigating disputes in Illinois.