Under what circumstances is the choice of law, non-binding mediation, binding arbitration, and consent to jurisdiction provision in Article 18.G of the Casiola Franchise Agreement prohibited?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
: Illinois law governs the agreements between the parties to this franchise.
Section 4 of the Illinois Franchise Disclosure Act Provides that any provision in a Franchise Agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a Franchise Agreement may provide for arbitration in a venue outside Illinois.
Your rights upon termination and non-renewal of a Franchise Agreement are set forth in Sections 19 and 20 of the Illinois Franchise Disclosure Act.
Section 41 of the Illinois Franchise Disclosure Act Provides that 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.
- Article 18.G. of the Franchise Agreement, under the heading "Choice of Law, Non-Binding Mediation, Binding Arbitration, and Consent to Jurisdiction", shall be amended by the addition of the following statement added after the end of the last sentence of Article 18.G. of the Franchise Agreement:
Illinois Addendum: Illinois law governs the agreements between the parties to this franchise.
Section 4 of the Illinois Franchise Disclosure Act Provides that any provision in a Franchise Agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a Franchise Agreement may provide for arbitration in a venue outside Illinois.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, Article 18.G of the Franchise Agreement, which covers "Choice of Law, Non-Binding Mediation, Binding Arbitration, and Consent to Jurisdiction," is subject to specific prohibitions and amendments based on the franchisee's location. For franchisees in Illinois, any provision designating jurisdiction or venue outside of Illinois is void, although the agreement may still allow for arbitration outside the state.
For franchisees in Maryland, the franchise agreement is amended to allow a franchisee to bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, despite the arbitration provisions. This ensures that franchisees do not waive their right to file a lawsuit in Maryland for violations of Maryland franchise law.
For franchisees in North Dakota, several provisions related to Article 18 are amended. Specifically, requirements for North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota may not be enforceable. Additionally, North Dakota law will apply to North Dakota franchisees, and provisions requiring a franchisee to consent to a waiver of trial by jury or exemplary and punitive damages are not enforceable under North Dakota law. These amendments ensure that Casiola franchisees in these states retain certain legal rights and protections under their respective state laws, overriding conflicting terms in the standard franchise agreement.