Regarding jurisdiction or venue, what provisions in a Deka Lash franchise agreement are considered void in Illinois?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
ILLINOIS ADDENDUM TO THE FRANCHISE AGREEMENT
If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control
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- Illinois law governs the Franchise Agreement.
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- In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and 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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- Franchisee rights upon termination and non-renewal are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.
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- In conformance with Section 41 of the Illinois Franchise Disclosure Act, 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.
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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.
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- Surety Bond. The Franchise 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."
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the Illinois Addendum to the Franchise Agreement specifies that any provision designating jurisdiction and venue outside of Illinois is void. This stems from Section 4 of the Illinois Franchise Disclosure Act. However, the agreement can stipulate that arbitration may occur outside of Illinois.
This provision is designed to protect Illinois-based Deka Lash franchisees from having to resolve disputes in potentially distant or inconvenient locations. By invalidating out-of-state jurisdiction and venue clauses, Illinois law ensures that legal proceedings related to the franchise agreement will generally take place within the state, providing a more accessible and familiar legal environment for the franchisee.
However, it's important to note the exception for arbitration. While lawsuits must occur in Illinois, Deka Lash franchise agreements can still require arbitration to take place elsewhere. Arbitration is a form of alternative dispute resolution that is often faster and less expensive than traditional litigation, but franchisees should be aware of where the arbitration would be held and consider any potential disadvantages of that location.