For a Buildingstars franchise in Illinois, can the franchise agreement designate jurisdiction and venue in a forum outside of Illinois?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT II STATE LAW ADDENDA
STATE LAW ADDENDA-ILLINOIS
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 voice. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
Your 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 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.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, if a franchisee is operating in Illinois, the franchise agreement cannot designate jurisdiction and venue in a forum outside of Illinois. The FDD specifies this restriction is in conformance with Section 4 of the Illinois Franchise Disclosure Act. This means that any legal disputes or proceedings related to the franchise agreement must take place within the state of Illinois. However, the agreement may stipulate that arbitration can occur outside of Illinois.
This provision is outlined in the State Law Addenda for Illinois, which takes precedence over any conflicting terms in the standard franchise agreement or Franchise Disclosure Document. The Illinois addendum ensures that Buildingstars franchisees in Illinois are protected by Illinois law regarding where legal proceedings occur. This prevents Buildingstars from forcing franchisees to resolve disputes in a potentially inconvenient or cost-prohibitive location.
Furthermore, the Illinois addendum states that any condition, stipulation, or provision requiring a franchisee to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is void. Additionally, no statement, questionnaire, or acknowledgement signed by a franchisee can waive claims under Illinois franchise law, including claims of fraud in the inducement, or disclaim reliance on statements made by Buildingstars or its representatives. This provision reinforces the protection of Illinois franchisees' rights under state law.