What state law governs the Chatime Franchise Agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Illinois law governs the Franchise Agreement.
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.
Your rights upon Termination and Non-Renewal are set forth in §§19 and 20 of the Illinois Franchise Disclosure Act.
In conformance with §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 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, the franchise agreement is governed by different state laws depending on the franchisee's location. For franchisees in Illinois, the agreement is governed by Illinois law, as stated in the Illinois Amendment to the Chatime Franchise Agreement. Similarly, the New York Amendment indicates that New York General Business Law applies to franchisees in New York, ensuring that franchisees retain their rights under Article 33 of the General Business Law of the State of New York. For franchisees in Maryland, Maryland law governs claims arising under the Maryland Franchise Registration and Disclosure Law.
This means that the specific legal rights and obligations of a Chatime franchisee can vary significantly based on the state in which they operate. For example, certain provisions in the standard franchise agreement may be modified or superseded by state-specific amendments to ensure compliance with local franchise laws. These amendments often address issues such as dispute resolution, termination rights, and waivers of legal claims.
Prospective Chatime franchisees should carefully review the specific state amendment applicable to their location to understand their rights and obligations under the franchise agreement. It is also advisable to consult with an attorney experienced in franchise law to ensure a full understanding of the legal implications of the franchise agreement in their particular state. This is especially important in states like North Dakota, where the Securities Commissioner has identified certain standard franchise agreement terms as potentially unfair or inequitable to franchisees.