What stipulations are considered void in the Aw franchise agreement or Franchisee Disclosure Questionnaire regarding compliance with Illinois law?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Any condition, stipulation or provision in this Agreement or in the Franchisee Disclosure Questionnaire purporting to bind Franchisee to waive compliance with any provision of the Illinois Franchise Disclosure Act or any other law of the State of Illinois is void.
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.
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.
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.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, several stipulations are considered void in the franchise agreement and Franchisee Disclosure Questionnaire to ensure compliance with the Illinois Franchise Disclosure Act and other Illinois laws. Specifically, any condition, stipulation, or provision that attempts to bind a franchisee to waive compliance with any provision of the Illinois Franchise Disclosure Act or any other law of the State of Illinois is void. This protects franchisees from unknowingly or unwillingly giving up their rights under Illinois law.
Additionally, the franchise agreement cannot designate jurisdiction and venue in a forum outside of Illinois, although it may allow for arbitration to take place outside the state. This ensures that Illinois franchisees have the ability to resolve disputes within their own state, providing them with easier access to the legal system and potentially reducing legal costs. Furthermore, no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under any applicable state franchise law, including claims of fraud in the inducement, or disclaim reliance on statements made by the franchisor or its representatives. This protects franchisees from being bound by clauses that could prevent them from pursuing legal action based on misrepresentations or fraudulent behavior.
Finally, the franchisor is required to defer the payment of the initial franchise fee until Aw has completed all initial obligations to the franchisee and the franchisee has commenced business operations. This requirement, imposed by the Illinois Attorney General, provides financial assurance to the franchisee, ensuring that they are not required to pay the full franchise fee before the franchisor has fulfilled its initial responsibilities. These stipulations collectively aim to protect the rights and interests of Aw franchisees in Illinois, ensuring compliance with state laws and providing a fair franchising environment.