For Buildingstars franchises in Illinois, can the franchise agreement provide for arbitration to take place outside of Illinois?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, Illinois law governs the franchise agreement. For Buildingstars franchises in Illinois, the franchise agreement may stipulate that arbitration can occur outside of Illinois. However, any provision that designates jurisdiction and venue in a forum outside of Illinois is void.
This means that while Buildingstars can include a clause requiring arbitration to take place outside of Illinois, it cannot force a franchisee to litigate a case outside of Illinois. The Illinois Franchise Disclosure Act aims to protect franchisees by ensuring certain legal rights and recourse within the state.
Prospective Buildingstars franchisees in Illinois should be aware of this provision, as it clarifies their rights regarding dispute resolution. While arbitration might occur out of state, the franchisee is not obligated to resolve disputes through jurisdiction and venue outside of Illinois.