For Budget franchisees, what is added after Paragraph 14.10 of the License Agreement regarding waiver of punitive damages and jury trial?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
The following is added after Paragraph 14.10 of the License Agreement:
"However, the waiver in this paragraph shall not apply to the extent prohibited by Section 705/41 of the Illinois Franchise Disclosure Act of 1987 which provides that "Any condition, stipulation, or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of this Act or any other law of this State is void. This Section shall not prevent any person from entering into a settlement agreement or executing a general release regarding a potential or actual lawsuit filed under any of the provisions of this Act, nor shall it prevent the arbitration of any claim pursuant to the provisions of Title 9 of the United States Code" or Illinois Regulations at Section 200.609."
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, specific language is added after Paragraph 14.10 of the License Agreement concerning the waiver of punitive damages and jury trials for franchisees in Illinois. The addition stipulates that the waiver mentioned in Paragraph 14.10 does not apply if it's prohibited by Section 705/41 of the Illinois Franchise Disclosure Act of 1987.
This section of the Illinois Franchise Disclosure Act states that any condition or provision requiring a person acquiring a franchise to waive compliance with any provision of the Act or any other law of the state is void. However, this does not prevent someone from entering into a settlement agreement, executing a general release regarding a potential or actual lawsuit, or arbitrating any claim under Title 9 of the United States Code or Illinois Regulations at Section 200.609.
In essence, while Budget's standard agreement includes a waiver of punitive damages and jury trials, this waiver is unenforceable in Illinois to the extent that it conflicts with the Illinois Franchise Disclosure Act. This ensures that Budget franchisees in Illinois retain their rights under state law, providing them with additional protection and recourse in case of disputes.