Does the Crave franchise agreement allow for arbitration outside of Illinois?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable.
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- Under Indiana Code 23-2-2.7-1 (10), jurisdiction and venue must be in Indiana if the franchisee so requests. This amends Article 19 of the Franchise Agreement and Section 19 of the Multi-Unit Development Agreement.
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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.
The appropriate sections of the Multi-Unit Development Agreement are amended to permit a franchisee to bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to the 2025 Crave FDD, the franchise agreement's standard choice of law might not be fully enforceable due to the Federal Arbitration Act. An addendum for the state of Indiana modifies the standard agreement, stating that jurisdiction and venue must be in Indiana if the franchisee requests it. This amendment overrides Article 19 of the Franchise Agreement.
A similar addendum for Maryland states that no statement signed by a franchisee can waive rights under state franchise law or disclaim reliance on franchisor statements. This Maryland addendum also specifies that franchisees can bring lawsuits in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
For prospective Crave franchisees, these stipulations mean that the ability to arbitrate or litigate outside of Illinois depends on the specific state where the franchise is located and the protections afforded by that state's franchise laws. Franchisees in Indiana, for example, have the right to request that jurisdiction and venue be in Indiana. Franchisees should consult with a legal professional to understand their rights and obligations regarding dispute resolution, based on their specific location and the terms of the franchise agreement and any applicable addenda.