Can a Crisp & Green franchisee waive the defense of an inconvenient forum?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
ADDENDUM TO CRISP & GREEN FRANCHISING LLC FRANCHISE DISCLOSURE DOCUMENT REQUIRED BY THE STATE OF ILLINOIS
Item 17 of this Disclosure Document is modified to include the following paragraph:
Sec. 705/4 of the Illinois Franchise Disclosure Act of 1987 provides that "any provision in a franchise/license agreement that designates jurisdiction or venue in a forum outside of Illinois is void."
Although the Franchise Agreement and Area Development Agreement provide that they will be governed by and construed in accordance with the laws of the State of Minnesota, we agree that the laws of the State of Illinois will govern the construction and interpretation of the Franchise Agreement and Area Development Agreement. The provisions of the Franchise Agreement and Area Development Agreement concerning governing law, jurisdiction, and venue shall not constitute a waiver of any right conferred on you by Illinois law.
Although the Franchise Agreement and Area Development Agreement require litigation to be instituted in the state courts located in the federal or state court for city closet where our principal executive office is located, except as you may be restricted by the arbitration provisions of the Franchise Agreement and Area Development Agreement, all litigation must be instituted in a court of competent jurisdiction located in the State of Illinois.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to the 2024 Crisp & Green Franchise Disclosure Document, the ability of a franchisee to waive the defense of an inconvenient forum depends on the state in which the franchise is located. For instance, the Illinois Addendum explicitly states that any provision designating jurisdiction or venue outside of Illinois is void. This means an Illinois Crisp & Green franchisee cannot waive their right to litigate in Illinois, regardless of what the standard franchise agreement says.
Conversely, the Maryland Addendum modifies Item 17 to allow franchisees to sue in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, despite the standard agreement requiring litigation in the city where Crisp & Green's principal executive office is located. However, this is subject to the mediation and arbitration provisions of the franchise agreement.
For franchisees in California, Virginia, Minnesota, Hawaii, Indiana, Maryland, Michigan, New York, North Dakota, Rhode Island, South Dakota, Washington, and Wisconsin, no statement or acknowledgment signed by the franchisee can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Crisp & Green. This provision supersedes any conflicting terms in other documents. Therefore, while the FDD doesn't directly address waiving the defense of an inconvenient forum in all states, it emphasizes the protection of franchisees' rights under state laws, suggesting that waivers undermining these rights may not be enforceable.