For Del Taco franchises in Illinois, is a provision designating jurisdiction and venue outside of Illinois valid according to the Illinois Franchise Disclosure Act?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
ILLINOIS
In recognition of the Illinois Franchise Disclosure Act and the Rules and Regulations promulgated thereunder, the Disclosure Document, Franchise Agreement and Development Agreement shall be modified as follows:
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- Illinois law shall apply to and govern the Franchise Agreement and Development Agreement.
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- In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement and Development Agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement development agreement may provide for arbitration to take place outside of Illinois.
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- Franchisees' right 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.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the Illinois Franchise Disclosure Act impacts the enforceability of certain provisions. Specifically, any provision within the Del Taco franchise agreement or development agreement that designates jurisdiction and venue in a forum outside of Illinois is considered void. This means that if a dispute arises, an Illinois Del Taco franchisee cannot be forced to litigate the matter in another state.
However, the FDD clarifies an important exception: the franchise agreement or development agreement may still stipulate that arbitration can occur outside of Illinois. So while a franchisee cannot be compelled to resolve disputes through traditional court proceedings in another state, they may be required to participate in arbitration out of state.
Furthermore, the FDD states that any condition, stipulation, or provision that attempts to bind a person acquiring a Del Taco franchise to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is void. This protects the franchisee from unknowingly giving up their legal rights under Illinois law. These modifications are explicitly made in recognition of the Illinois Franchise Disclosure Act and its associated rules and regulations.