What specific controversies are excluded from arbitration under the Cinnaholic franchise agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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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 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, the franchise agreement in Illinois has specific stipulations regarding arbitration and dispute resolution. For franchisees operating in Illinois, or Illinois residents, any statement, questionnaire, or acknowledgement signed by the franchisee cannot waive claims under state franchise law, including fraud in the inducement. Additionally, these documents cannot disclaim reliance on behalf of Cinnaholic. This provision takes precedence over any conflicting terms in documents related to the franchise agreement.
In essence, while the Cinnaholic franchise agreement may generally include arbitration clauses, Illinois law ensures that franchisees retain their rights to pursue certain claims, particularly those related to fraud or misrepresentation, under state franchise law. This protection is in accordance with the Illinois Franchise Disclosure Act, which aims to safeguard franchisees' interests.
Therefore, prospective Cinnaholic franchisees in Illinois should be aware that their ability to pursue legal remedies for specific grievances, such as fraud in the inducement, is preserved despite any arbitration clauses in the franchise agreement. This addendum ensures that franchisees do not unknowingly waive their rights under Illinois law when entering into the franchise agreement.