For Crisp & Green franchisees in Illinois, does the Franchise Agreement's designation of jurisdiction or venue outside of Illinois remain valid?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
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 Crisp & Green's 2024 Franchise Disclosure Document, any provision in the franchise agreement that designates jurisdiction or venue in a forum outside of Illinois is void with respect to any cause of action enforceable in Illinois. This is in accordance with Section 4 of the Illinois Franchise Disclosure Act.
This means that if a Crisp & Green franchisee in Illinois has a legal dispute that is otherwise enforceable in Illinois, they cannot be forced to litigate the matter in a different state, even if the franchise agreement specifies an out-of-state venue. The Illinois Addendum to the Area Development Agreement reinforces this by stating that it is applicable if the developer is domiciled in Illinois, the offer of the franchise is made or accepted in Illinois, and the franchise business is or will be located in Illinois.
The Franchise Agreement and Area Development Agreement state that they will be governed by and construed in accordance with the laws of Minnesota. However, the laws of Illinois will govern the construction and interpretation of the Franchise Agreement and Area Development Agreement for Illinois franchisees. The provisions of the Franchise Agreement and Area Development Agreement concerning governing law, jurisdiction, and venue will not constitute a waiver of any right conferred on the franchisee by Illinois law.
Therefore, Crisp & Green franchisees in Illinois are protected by Illinois law, ensuring that they can pursue legal action within the state, and that Illinois law will govern the agreement, regardless of any conflicting provisions in the standard franchise agreement.