Does the Illinois Addendum to the Carvel Franchise Agreement allow for arbitration to take place outside of Illinois, even if jurisdiction and venue provisions outside of Illinois are void?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
ILLINOIS ADDENDUM TO FRANCHISE AGREEMENT
In recognition of the requirements of the Illinois Franchise Disclosure Act of 1987, Ill. Comp. Stat. §§ 705/1 through 705/44, the Franchise Agreement, for franchises offered and sold in the State of Illinois or to Illinois residents, is amended as follows:
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- Illinois law governs the Franchise Agreement.
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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.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the Illinois Addendum to the Franchise Agreement addresses the interplay between Illinois law and the franchise agreement's provisions. Specifically, it acknowledges the Illinois Franchise Disclosure Act of 1987.
The addendum states that while any provision designating jurisdiction and venue outside of Illinois is void, the franchise agreement can still allow for arbitration to occur outside the state. This means that even though an Illinois Carvel franchisee cannot be forced to litigate disputes in another state, they can agree to resolve disputes through arbitration in a location outside of Illinois.
This distinction is important for prospective Carvel franchisees in Illinois because it clarifies their legal rights regarding dispute resolution. While they are protected from having to litigate outside of Illinois, they may still be required to participate in arbitration proceedings in another state if the franchise agreement stipulates it. Franchisees should carefully consider the implications of agreeing to out-of-state arbitration, including potential travel costs and the application of different state laws during the arbitration process.