Can a Coffee News franchise agreement provide for arbitration to take place outside of Illinois?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
Addendum No.1 for the State of Illinois
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- Illinois law governs the Franchise 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 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 and 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 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, the franchise agreement can stipulate that arbitration occurs outside of Illinois. However, this allowance is specifically addressed within the addendum for Illinois.
For prospective Coffee News franchisees in Illinois, this means that while the franchise agreement might specify a location outside of Illinois for arbitration, such as Bangor, Maine as detailed elsewhere in the document, this provision is enforceable under Illinois law. This clarification is crucial for franchisees to understand their rights and obligations regarding dispute resolution.
It is important for franchisees to carefully review the state-specific addenda to understand how local laws may modify the general terms of the franchise agreement. This ensures that franchisees are aware of their legal rights and the specific conditions under which they operate their Coffee News franchise within their state.