Does signing the Illinois Amendment to the Engel & Volkers Franchise Agreement subject the parties to the Illinois Franchise Disclosure Act if the jurisdictional requirements of the Act are not met?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
This Amendment pertains to franchises sold in the State of Illinois that are subject to the Illinois Franchise Disclosure Act (the "Act") and is for the purpose of complying with Illinois statutes and regulations. Signing this Amendment where the jurisdictional requirements of the Act are not met does not subject the parties to the provisions of the Act. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended to include the following:
Franchisor and Franchisee hereby agree that the Franchise Agreement dated , 20, will be amended as follows: Illinois law shall apply to and govern the Franchise Agreement. a franchise agreement may provide for arbitration to take place outside of Illinois. 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, Illinois Franchise Disclosure Act. Franchisees' right upon Termination and Non-Renewal are set forth in sections 19 and 20 of the Franchise Disclosure Act or any other law of Illinois is void. 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 Amendment as of the date set forth above. IN WITNESS WHEREOF, Franchisor and Franchisee have duly executed and delivered this ENGEL & VÖLKERS AMERICAS, INC. Its: Its: Its:
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, signing the Illinois Amendment to the Engel & Volkers Franchise Agreement does not automatically subject the parties to the Illinois Franchise Disclosure Act if the jurisdictional requirements of the Act are not met. The amendment is specifically designed to ensure compliance with Illinois statutes and regulations when the Act applies.
This means that if a franchisee's operations in Illinois do not meet the legal thresholds that trigger the Illinois Franchise Disclosure Act, then simply signing the amendment will not cause the Act to apply. This could occur, for example, if the franchisee is not physically located in Illinois or does not meet certain sales or investment criteria within the state.
Engel & Volkers includes this provision to avoid unintended regulatory burdens on franchise relationships that fall outside the scope of the Illinois Franchise Disclosure Act. However, it is important for prospective franchisees to understand the specific jurisdictional requirements of the Act and to seek legal counsel to determine whether their operations in Illinois would be subject to the Act, irrespective of the amendment.