What effect does a statement signed by a Cinnaholic franchisee in Illinois have on waiving claims under state franchise law?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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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 acknowledgement 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 behalf of the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, any statement, questionnaire, or acknowledgment signed by a franchisee in Illinois related to starting the franchise does not waive claims under Illinois franchise law. This includes claims of fraud. This protection supersedes any other conflicting terms in any document signed during the franchise commencement. This stipulation is included as an addendum required by the state of Illinois.
This means that even if a Cinnaholic franchisee in Illinois signs a document that appears to waive their rights under Illinois franchise law, that waiver is not legally binding. The franchisee retains the right to pursue claims against the franchisor under Illinois law, including claims of fraud related to the inducement of the franchise agreement. This provision is designed to protect franchisees from unknowingly or unintentionally giving up their legal rights.
Illinois law also stipulates that any provision in the franchise agreement that designates jurisdiction and venue in a forum outside of Illinois is void, although arbitration may occur outside of the state. Furthermore, Illinois defers payment of initial franchise fees until Cinnaholic has met its initial obligations to the franchisee and the franchisee has commenced business operations. These regulations reflect Illinois' specific requirements for franchise agreements, which Cinnaholic must adhere to for franchisees operating in that state.