Can a Casiola franchisee agree to conduct litigation outside of their state at the time of litigation?
Casiola Franchise · 2024 FDDAnswer from 2024 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 void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
Article 18 of the Franchise Agreement is hereby amended by the addition of the following language: "Covenants requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota may not be enforceable in North Dakota."
In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola FDD, the ability of a franchisee to agree to conduct litigation outside of their state depends on the specific state's franchise laws. For instance, the Illinois Franchise Disclosure Act states that any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, the franchise agreement may allow for arbitration to occur outside of Illinois.
Similarly, the North Dakota Franchise Investment Law includes an amendment stating that provisions requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota may not be enforceable in North Dakota. For franchisees in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.
These stipulations mean that a Casiola franchisee's ability to litigate outside their state is subject to the specific protections and regulations provided by their state's franchise laws, which may override the standard terms in the franchise agreement. Prospective franchisees should be aware of their state's specific laws regarding jurisdiction, venue, and arbitration to understand their rights fully.