If the arbitration clause does not apply, how is the dispute resolved for a Big Apple Bagels franchise?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
This Addendum is to a BAGELS Franchise Agreement dated , 20 between BAB Systems, Inc. and (Franchisee) to amend said Agreement to add the following: Illinois law governs the BAGELS Franchise Agreement. is void. outside of Illinois. In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a BAGELS Franchise Agreement that designates jurisdiction and venue in a forum outside of the State of Illinois However, a BAGELS Franchise Agreement may provide for arbitration to take place Illinois Franchise Disclosure Act. Franchisee's rights upon termination and non-renewal are set forth in Sections 19 and 20 of the Illinois Franchise Disclosure Act or any other law of Illinois is void. 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
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to the 2025 Big Apple Bagels FDD, for franchisees in Illinois, any provision in the franchise agreement that designates jurisdiction and venue in a forum outside of Illinois is void. This is specified in the BAB Systems, Inc. Addendum to the Bagels Franchise Agreement for the State of Illinois.
This means that if a dispute arises between Big Apple Bagels and a franchisee in Illinois, and the arbitration clause is not applicable, the dispute would need to be resolved within the state of Illinois, adhering to Illinois law. The Illinois Franchise Disclosure Act stipulates that any provision in a franchise agreement that designates jurisdiction and venue outside of Illinois is not enforceable.
For a prospective franchisee in Illinois, this addendum provides a level of protection by ensuring that legal disputes are handled within the state's legal system. It prevents the franchisee from having to travel to another state to resolve disputes, which could be costly and inconvenient. This addendum ensures that Illinois law and the Illinois Franchise Disclosure Act take precedence in governing the franchise agreement, offering franchisees certain rights and protections under state law.