For a Bonchon franchise in Illinois, is a provision designating jurisdiction and venue outside of Illinois valid according to the Illinois Franchise Disclosure Act?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
ILLINOIS ADDENDUM TO FRANCHISE AGREEMENT
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- Illinois law governs the Franchise Agreement(s).
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- 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.
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- Your rights upon Termination and Non-Renewal are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.
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- 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.
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- No statement, questionnaire, or acknowledgement 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.
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- This Addendum may be executed in counterparts, which together shall constitute one and the same instrument. Signatures via DocuSign, .PDF file, facsimile, or other electronic format have the same force and effect as originals.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if you are opening a Bonchon franchise in Illinois, any clause within the franchise agreement that stipulates jurisdiction and venue for legal proceedings to be in a state other than Illinois is considered void. This protection is explicitly stated in the Illinois Addendum to both the Franchise Agreement and the Area Development Agreement, ensuring that Illinois franchisees are not forced to litigate disputes in a distant or inconvenient forum. This provision is in accordance with Section 4 of the Illinois Franchise Disclosure Act.
This addendum means that Bonchon franchisees in Illinois have the right to resolve legal disputes within the state's legal system, providing a level of protection and convenience. It prevents Bonchon from requiring franchisees to travel to another state for hearings or trials, which could significantly increase the franchisee's legal costs and logistical burdens. The Illinois Addendum ensures that franchisees can address legal matters in a familiar jurisdiction with local legal representation.
However, it is important to note that while jurisdiction and venue provisions mandating out-of-state forums are void, the Bonchon franchise agreement may still include a clause that requires arbitration to take place outside of Illinois. Arbitration is a form of alternative dispute resolution where a neutral third party hears the dispute and renders a decision. While the location of arbitration can be outside Illinois, any court action must occur within Illinois. This distinction is crucial for prospective franchisees to understand, as it affects how and where disputes with Bonchon can be resolved.