If the Exit agreement is governed by Illinois law, is a provision designating jurisdiction outside of Illinois valid?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
If this Agreement is governed by the laws of the State of Illinois, then: (1) the acknowledgments made by Franchisee in Section 41 are not allowed under the Illinois Franchise Disclosure Act and (2) any provision of this Agreement which designates jurisdiction or venue outside of the State of Illinois is void
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, if the franchise agreement is governed by Illinois law, any provision that designates jurisdiction or venue outside of Illinois is considered void. This means an Exit franchisee in Illinois would not be bound by any clause in the agreement that requires disputes to be resolved in a court outside of Illinois.
This protection is specifically outlined in the FDD to comply with the Illinois Franchise Disclosure Act, which aims to protect franchisees within the state. It ensures that Illinois Exit franchisees have the right to resolve legal matters within their home state, which can reduce the costs and logistical challenges associated with legal proceedings.
Prospective Exit franchisees in Illinois should be aware of this provision, as it provides a degree of legal protection. It's advisable to consult with an attorney to fully understand the implications of this clause and how it interacts with other aspects of the franchise agreement.