Under what conditions is it unlawful for Big Blue Swim School to repurchase a franchisee's business?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following language is added to the end of Item 17 of the Franchise Disclosure Document:
Except for the Federal Arbitration Act that applies to arbitration, Illinois law governs the Franchise Agreement.
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.
Franchisees' rights upon termination and non-renewal are set forth in Sections 19 and 20 of the Illinois Franchise Disclosure Act.
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. This provision supersedes any other term of any document executed in connection with the franchise.
MARYLAND
Source: Item 23 — RECEIPTS (FDD pages 76–278)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, it is unlawful for Big Blue Swim School to enforce certain provisions within the franchise agreement under specific circumstances, particularly in Illinois and California.
In Illinois, any provision in the franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void, except for the Federal Arbitration Act that applies to arbitration. Additionally, any condition, stipulation, or provision that attempts to bind a person acquiring a Big Blue Swim School franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void. This means Big Blue Swim School cannot force franchisees to resolve disputes outside of Illinois (except for arbitration) or waive their rights under Illinois law.
For franchisees operating outlets in California, the California Franchise Investment Law and the California Franchise Relations Act will apply, regardless of any conflicting choice of law or dispute resolution venue stated in the Franchise Agreement. Furthermore, any contract that restrains a former franchisee from engaging in a lawful trade or business is void under California Business and Professions Code Section 16600. This means that non-compete clauses that extend beyond the termination of the franchise agreement are not enforceable in California. Additionally, Big Blue Swim School cannot enforce any statement, questionnaire, or acknowledgment that waives claims under any applicable state franchise law, including fraud in the inducement, or disclaims reliance on any statement made by the franchisor.