Can the Chatime franchise agreement provide for arbitration to take place outside of Illinois?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
In conformance with §4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction or venue in a forum outside the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, the Illinois Addendum specifies that while Illinois law governs the Franchise Agreement, any provision designating jurisdiction or venue outside of Illinois is void. However, the addendum explicitly states that a Chatime franchise agreement can provide for arbitration to occur outside of Illinois, even for franchisees operating in Illinois.
This means that if a dispute arises between Chatime and an Illinois-based franchisee, the arbitration proceedings may be held in a location outside of Illinois, if the franchise agreement stipulates so. This could potentially increase costs for the franchisee, who may need to travel and hire legal representation in the designated arbitration location.
Prospective Chatime franchisees in Illinois should carefully review the franchise agreement to understand where arbitration proceedings would be held. They should consider the potential costs and inconveniences associated with out-of-state arbitration and negotiate the terms if possible. Understanding these stipulations is crucial before entering into a franchise agreement with Chatime.