If the Exit franchise agreement is governed by Illinois law, is any provision designating jurisdiction or venue outside of Illinois valid?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- (B) ILLINOIS.
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 that if a dispute arises and the agreement specifies that legal proceedings must occur in a state other than Illinois, that provision will not be enforceable in Illinois.
For a prospective Exit franchisee in Illinois, this is a beneficial provision. It ensures that any legal disputes related to the franchise agreement will be resolved within the state of Illinois, potentially reducing travel costs and the inconvenience of dealing with legal proceedings in a distant location. It also means that Illinois franchise laws and regulations will apply, offering a level of protection to the franchisee.
This type of state-specific modification is not uncommon in franchise agreements, as franchise laws vary from state to state. Franchise agreements often include provisions addressing how the agreement is modified by the laws of certain states. Franchisees should pay close attention to these state-specific modifications to understand their rights and obligations in their particular state.