Can a Crown Gold Exchange franchise agreement provide for arbitration outside of Illinois?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
Illinois law governs the agreements between the parties to this franchise.
Section 4 of the 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.
Source: Item 23 — RECEIPTS (FDD pages 39–114)
What This Means (2024 FDD)
According to the 2024 Crown Gold Exchange FDD, Illinois law governs the agreements between the parties to the franchise agreement. However, Section 4 of the Illinois Franchise Disclosure Act states that any provision in a franchise agreement that designates jurisdiction or venue outside the State of Illinois is void.
Despite this, the FDD specifies that a Crown Gold Exchange franchise agreement may provide for arbitration outside of Illinois. This means that while lawsuits must be filed in Illinois, the franchise agreement can stipulate that disputes are resolved through arbitration in another state.
This distinction is important for prospective franchisees in Illinois, as it clarifies that they may be required to participate in arbitration proceedings outside of Illinois, even though they cannot be compelled to litigate outside the state. Franchisees should consider the potential costs and inconveniences associated with out-of-state arbitration when evaluating the franchise opportunity.