Does the Illinois Franchise Disclosure Act allow Desi District franchise agreements to designate jurisdiction of venue outside of Illinois?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
In recognition of the requirements of the Illinois Franchise Disclosure Act of 1987, as amended (the "Act"), this Disclosure Document is amended as follows:
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 of venue outside the State of Illinois is void. However, a franchise agreement may provide for arbitration outside of Illinois.
Section 41 of the Act provides that any condition, stipulation, or provision purporting to bind any person acquiring any franchise to waive compliance with the Act or any other law of Illinois is void.
Your rights upon termination and non-renewal of a franchise agreement are set forth in sections 19 and 20 of the Act.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the Illinois Addendum clarifies the state's stance on venue selection in franchise agreements. Specifically, Section 4 of the Illinois Franchise Disclosure Act stipulates that any provision within a Desi District franchise agreement that designates jurisdiction or venue outside the State of Illinois is considered void. This means that franchisees in Illinois cannot be forced to litigate disputes in another state.
However, there is an exception to this rule. The Illinois Franchise Disclosure Act does allow for arbitration to occur outside of Illinois, even if the franchise agreement specifies it. This means that while a franchisee cannot be required to resolve disputes through litigation in another state, they can be required to participate in arbitration proceedings outside of Illinois.
Furthermore, Section 41 of the Act reinforces franchisee protection by stating that any condition, stipulation, or provision that attempts to bind a person acquiring a Desi District franchise to waive compliance with the Act or any other Illinois law is void. This ensures that franchisees cannot unknowingly or unwillingly surrender their rights under Illinois law. The addendum also mentions that franchisee rights upon termination and non-renewal are protected under sections 19 and 20 of the Act.