Where will litigation between the franchisee and Extreme Art Studio be commenced and maintained in Illinois?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
ight to offer the Franchises are:
None
- States in which the proposed registration of these Franchises has been withdrawn are:
None
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
ILLINOIS
Sections 4 and 41 and Rule 608 of the Illinois Franchise Disclosure Act states that court litigation must take place before Illinois federal or state courts and all dispute resolution arising from the terms of this Agreement or the relationship of the parties and conducted through arbitration or litigation shall be subject to Illinois law. The FDD, Franchise Agreement and Supplemental Agreements are amended accordingly.
The governing law or choice of law clause described in the FDD and contained in the Franchise Agreement and Supplemental Agreements is not enforceable under Illinois law. Illinois law governs the Franchise Agreements. This governing law clause shall not be construed to negate the application of Illinois law in all situations to which it is applicable.
Section 41 of the Illinois Franchise Disclosure Act states that "any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of this Act or any other law of this State is void." The Franchise Agreement is amended accordingly. To the extent that the Franchise Agreement would otherwise violate Illinois law, such Agreement is amended by providing that all litigation by or between you and us, arising directly or indirectly from the Franchise relationship, will be commenced and maintained in the state courts of Illinois or, at our election, the United States District Court for Illinois, with the specific venue in either court system determined by appropriate jurisdiction and venue requirements, and Illinois law will pertain to any claims arising under the Illinois Franchise Disclosure Act.
Source: Item 23 — RECEIPTS (FDD pages 49–214)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio FDD, if a dispute arises between the franchisee and Extreme Art Studio and litigation is necessary, such litigation must be initiated and maintained in the state courts of Illinois. However, Extreme Art Studio has the option to instead pursue the matter in the United States District Court for Illinois. The specific venue within either court system will be determined based on jurisdiction and venue requirements. Furthermore, Illinois law will govern any claims arising under the Illinois Franchise Disclosure Act.
This stipulation is a result of Sections 4 and 41 and Rule 608 of the Illinois Franchise Disclosure Act, which mandates that court litigation occur within Illinois federal or state courts. It also dictates that all dispute resolutions, whether through arbitration or litigation, are subject to Illinois law. The FDD, Franchise Agreement, and Supplemental Agreements are amended to reflect this requirement.
This means that any clause in the Franchise Agreement that designates jurisdiction and venue outside of Illinois is void, although the agreement may still allow for arbitration to occur outside of Illinois. This ensures that Illinois franchisees are protected by Illinois law and have access to Illinois courts for resolving disputes with Extreme Art Studio.