Under what circumstances do the state-specific terms modify the Cream franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The state-specific terms below will apply to this Agreement and modify the terms to this Agreement, if the transaction satisfies the jurisdictional requirements described below for any particular state law and is not otherwise exempt from such law. The provisions of multiple states may apply.
The following provision applies if you or the franchise granted hereby are subject to the franchise laws in Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, or Wisconsin: 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.
ILLINOIS
The following provisions are annexed to and form part of this Agreement if and only if, and in such case to the extent that: (a) you are domiciled in the State of Illinois or (b) the offer of the franchise is made or accepted in the State of Illinois and your franchised business is or will be operated in the State of Illinois.
- The following language is added to the end of the Agreement:
Except for the U.S. Federal Arbitration Act and other federal laws in the U.S., the laws of the State of Illinois will govern this Agreement.
Section 4 of the Illinois Franchise Disclosure Act provides that any provision in a franchise agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a franchise agreement may provide for arbitration outside of Illinois.
Section 41 of the Illinois Franchise Disclosure Act provides that 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.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the state-specific terms listed in Attachment F to the Franchise Agreement will apply and modify the terms of the agreement if the franchise transaction satisfies the jurisdictional requirements for a particular state law and is not otherwise exempt from such law. The FDD notes that the provisions of multiple states may apply.
For franchisees subject to franchise laws in Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, or Wisconsin, no statement, questionnaire, or acknowledgment signed in connection with the franchise relationship can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Cream or its representatives. This provision supersedes any other conflicting term in the franchise agreement.
Specifically for Illinois, additional provisions are annexed to and form part of the agreement if the franchisee is domiciled in Illinois, or if the franchise offer is made or accepted in Illinois and the franchised business is or will be operated in Illinois. In these cases, Illinois law will govern the agreement, excluding the U.S. Federal Arbitration Act and other federal laws. Any provision designating jurisdiction or venue outside Illinois is void, although arbitration outside of Illinois is permitted. Furthermore, any condition that binds the franchisee to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is void. The franchisee's rights upon termination and non-renewal are subject to sections 19 and 20 of the Illinois Franchise Disclosure Act.