What law governs the Chicken Guy Development Agreement?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Illinois law governs the Development 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 of an agreement 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.
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- No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the Development Agreement is governed by Illinois law. However, this is subject to certain stipulations and potential modifications depending on the franchisee's location.
For franchisees in Illinois, any provision designating jurisdiction and venue outside of Illinois is void, although arbitration may occur outside the state. The franchisee's rights upon termination and non-renewal are protected by the Illinois Franchise Disclosure Act. Furthermore, franchisees cannot waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law.
For franchisees in other states like Minnesota and New York, addenda to the Development Agreement specify that certain provisions of those states' franchise laws will take precedence. For example, Minnesota franchisees are entitled to specific statutory rights regarding releases, termination notice, and venue. Similarly, New York franchisees' claims arising under New York franchise law will be governed by that law, regardless of the Development Agreement's general choice of law provision. California franchisees also have additional disclosures and protections under California law, particularly concerning transfer, termination, and non-renewal rights.
These stipulations ensure that franchisees' rights are protected under their local state laws, even if the Development Agreement generally defaults to another state's laws. Prospective franchisees should carefully review any state-specific addenda and consult with legal counsel to understand how these provisions affect their rights and obligations.