For Belocal franchises in Illinois, is a provision designating jurisdiction and venue outside of Illinois valid, and what is the exception for arbitration?

According to Belocal's 2025 Franchise Disclosure Document, Illinois has specific regulations regarding venue and jurisdiction clauses within franchise agreements. For Belocal franchisees in Illinois, any provision in the Franchise Agreement that designates jurisdiction and venue in a forum outside of Illinois is considered void, meaning it cannot be enforced. This protects franchisees from having to travel to a distant location to resolve disputes.

However, there is an exception to this rule. The Belocal Franchise Agreement may include a provision that allows for arbitration to take place outside of Illinois. This means that while a franchisee cannot be forced to litigate a case in another state, they can agree to resolve disputes through arbitration in a different location. Arbitration is a form of alternative dispute resolution where a neutral third party hears both sides of a case and makes a binding decision.

This distinction is important for prospective Belocal franchisees in Illinois to understand. While they are protected from being forced to litigate outside of the state, they may still be required to participate in arbitration in another location if the Franchise Agreement stipulates it. Franchisees should carefully review the dispute resolution section of the Franchise Agreement and consult with an attorney to fully understand their rights and obligations.