Which state's law governs litigation with Aw?
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. |
| u. Dispute resolution by arbitration | Sections 18.1 and | Disputes must be mediated before filing an |
| or mediation | 18.2 | arbitration action. |
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 litigation with Aw, although this is subject to state law. Specifically, Section 18.4 of the Franchise Agreement states that litigation must occur in Illinois. Additionally, the franchise laws of a franchisee's state will apply if the franchisee meets the jurisdictional requirements of that state; this too is subject to state law.
This means that if a franchisee has a dispute with Aw that results in litigation, the lawsuit must be filed in Illinois. However, the laws applied in that litigation will be those of Illinois, unless the franchisee's state has specific franchise laws that apply given the franchisee's location and other jurisdictional factors. This is a fairly common arrangement in franchising, as it provides the franchisor with a consistent legal environment while also recognizing that state franchise laws may offer additional protections to franchisees.
Prospective Aw franchisees should be aware of this clause and understand that they may need to travel to Illinois for any litigation. They should also consult with an attorney to determine how the franchise laws of their own state might affect their rights and obligations under the franchise agreement. It is important to note that the FDD states that disputes must be mediated before filing an arbitration action.