Before initiating arbitration for a Bang Cookies franchise dispute, what prerequisite requirement must be met?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
ILLINOIS FRANCHISE AND DEVELOPMENT AGREEMENT AMENDMENT
Amendments to the Bang Cookies Franchise Agreement
In recognition of the requirements of the Illinois Franchise Disclosure Act, 815 ILCS 705/1 to 705/45, and Ill. Admin. Code tit. 15, §200.100 et seq., the undersigned agree to the following modifications to the Bang Cookies Franchise LLC Franchise Agreement (the "Franchise Agreement") and, if Franchisor and Franchisee both sign the Bang Cookies Franchise LLC Multi-Unit Development Agreement (the "Development Agreement"), as follows:
- Article 18.F. of the Franchise Agreement, and if Franchisee executes a Development Agreement, Article 7.5 of the Development Agreement, under the heading "Governing Law", shall be amended by the addition of the following statement added after the end of the last sentence of Article 18.F. of the Franchise Agreement and Article 7.5 of the Development Agreement:
Illinois Addendum: Illinois law governs the agreements between the parties to this franchise.
Section 4 of the Illinois Franchise Disclosure Act Provides that any provision in a Franchise Agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a Franchise Agreement may provide for arbitration in a venue outside Illinois.
Your rights upon termination and non-renewal of a Franchise Agreement are set forth in Sections 19 and 20 of the Illinois Franchise Disclosure Act.
Section 41 of the Illinois Franchise Disclosure Act Provides that 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
- Article 18.G. of the Franchise Agreement, and if Franchisee executes a Development Agreement, Article 7.6 of the Development Agreement, under the heading "Choice of Law, Non-Binding Mediation, Binding Arbitration, and Consent to Jurisdiction", shall be amended by the addition of the following statement added after the end of the last sentence of Article 18.G. of the Franchise Agreement and Article 7.6 of the Development Agreement:
Illinois Addendum: Illinois law governs the agreements between the parties to this franchise.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
Based on the 2024 Bang Cookies Franchise Disclosure Document, specific requirements for initiating arbitration are detailed within the Illinois Franchise and Development Agreement Amendment. To initiate arbitration, franchisees in Illinois must adhere to Section 4 of the Illinois Franchise Disclosure Act, which stipulates that while a Franchise Agreement can specify arbitration outside of Illinois, any provision designating jurisdiction or venue outside the state is void. This means that while arbitration may occur out-of-state, Illinois law governs the agreement.
Additionally, the Illinois amendment modifies Article 18.F of the Franchise Agreement and Article 7.5 of the Development Agreement, adding that Illinois law governs the agreements between the parties. Similarly, Article 18.G of the Franchise Agreement and Article 7.6 of the Development Agreement are amended to include the same statement regarding Illinois law. These modifications ensure that Illinois franchisees' rights are protected under Illinois law, even in arbitration proceedings.
For a prospective Bang Cookies franchisee in Illinois, this means that while the franchise agreement may allow for arbitration, Illinois law will take precedence. It is important for franchisees to understand their rights under the Illinois Franchise Disclosure Act, particularly Sections 19, 20, and 41, which address termination, non-renewal, and waivers of compliance. Franchisees should consult with legal counsel to ensure they fully understand their rights and obligations before entering into any franchise agreement.