Does the Deka Lash franchise agreement allow for the application of laws regulating the sale of franchises, regardless of jurisdictional requirements?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
ILLINOIS ADDENDUM TO THE AREA DEVELOPMENT AGREEMENT
If any of the terms of the Area Development Agreement are inconsistent with the terms below, the terms below control.
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- Any condition, stipulation, or provision of the Area Development Agreement purporting to bind you to waive compliance with any provision of the Illinois Franchise Disclosure Act or any other law of the State of Illinois is void. 815 ILCS 705/41.
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- The Area Development Agreement is modified to also provide the following: "Based on our current financial condition, the Illinois Attorney General's Office has required a financial assurance which is being satisfied by posting a surety bond which we filed with the Illinois Attorney General's Office."
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- Illinois law governs the agreements between the parties to this franchise.
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- Any provision in a franchise agreement that designates jurisdiction or venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
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- 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.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, the franchise agreement acknowledges the applicability of state laws regulating franchise sales, particularly within Illinois. The Illinois Addendum to the Area Development Agreement explicitly states that any term within the agreement that attempts to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is void. This indicates that Deka Lash recognizes and adheres to the franchise laws specific to Illinois, ensuring franchisees in Illinois retain their rights and protections under those laws.
Furthermore, the addendum specifies that Illinois law governs the agreements between the parties and that any provision designating jurisdiction or venue outside of Illinois is void, although arbitration outside of Illinois is permitted. This reinforces the importance of Illinois law in governing the franchise relationship for franchisees operating in Illinois. Additionally, any statement or acknowledgment signed by a franchisee cannot waive claims under state franchise law or disclaim reliance on statements made by Deka Lash, its sellers, or representatives, further protecting the franchisee's rights.
This approach is fairly common in franchising, as franchisors often include addenda to their franchise agreements to address specific state laws that may differ from the general terms of the agreement. This ensures compliance with varying legal requirements across different jurisdictions and provides franchisees with the legal protections afforded to them by their state's franchise laws. Prospective Deka Lash franchisees should carefully review any state-specific addenda to understand their rights and obligations within their particular state.