What does Section 4 of the Illinois Franchise Disclosure Act state regarding jurisdiction or venue in the Bft Multi-Unit Agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 4 of the Illinois Franchise Disclosure Act provides that any provision in a multiunit agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a multi-unit agreement may provide for arbitration outside of Illinois.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Section 4 of the Illinois Franchise Disclosure Act addresses jurisdiction and venue for multi-unit agreements. Specifically, it states that any provision within a multi-unit agreement that designates jurisdiction or venue outside of Illinois is considered void. This means Bft franchisees in Illinois cannot be forced to litigate disputes in another state.
However, there is an exception to this rule. The Illinois Franchise Disclosure Act allows a multi-unit agreement to include provisions for arbitration to occur outside of Illinois. So, while Bft cannot require franchisees to resolve disputes through traditional court proceedings in another state, they can mandate out-of-state arbitration.
This information is included in a rider to the Bft Multi-Unit Agreement for use in Illinois. This rider also states that, except for the U.S. Federal Arbitration Act and other federal laws, the laws of Illinois will govern the Franchise Agreement and Multi-Unit Agreement.