Under what conditions do the Illinois-specific provisions apply to the Cream Area Development Agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The following provisions are annexed to and form part of this Area Development 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 Area Development 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.
Your rights upon termination and non-renewal of a franchise agreement are subject to sections 19 and 20 of the Illinois Franchise Disclosure Act.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the Illinois-specific provisions are annexed to and form part of the Area Development Agreement under specific conditions. These provisions apply only if one of the following conditions is met: (a) the franchisee is domiciled in the State of Illinois, or (b) the offer of the franchise is made or accepted in the State of Illinois, and the franchised business is or will be operated in the State of Illinois.
If either of these conditions is satisfied, several specific stipulations become part of the Area Development Agreement. Firstly, Illinois law, excluding the U.S. Federal Arbitration Act and other federal laws, will govern the Agreement. Secondly, any provision that designates jurisdiction or venue outside of Illinois is void, although arbitration outside of Illinois is permitted. Thirdly, any condition that requires the franchisee to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is void. Lastly, the franchisee's rights upon termination and non-renewal are subject to sections 19 and 20 of the Illinois Franchise Disclosure Act.
For a prospective Cream franchisee, this means that if they live in Illinois or if the franchise deal was made in Illinois and the business will operate there, certain protections under Illinois law are automatically included in their Area Development Agreement. These protections prevent the franchisee from being forced to litigate disputes outside of Illinois and ensure that they cannot waive their rights under Illinois franchise law. This offers a degree of legal certainty and protection for franchisees operating in Illinois.