Regarding jurisdiction and venue for Fat Shack franchise agreements in Illinois, what does the Illinois Franchise Disclosure Act state?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
22.5. Governing Law/Consent to Jurisdiction/Waiver of Jury Trial
The United States Federal Arbitration Act shall govern all questions about the enforceability of Sections 22.1 and 22.2 and the confirmation of any arbitration awards pursuant to such procedures, and no arbitration issues are to be resolved pursuant to any other statutes, regulations or common law. Otherwise, except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et seq.) or other United States federal law, this Agreement shall be interpreted under the laws of the State of Colorado and any dispute between the parties shall be governed by and determined in accordance with the internal substantive laws, and not the laws of conflict, of the State of Colorado, which laws shall prevail in the event of any conflict of law. Notwithstanding the foregoing, the parties agree that the Colorado Consumer Protection Act (COLO. REV. STAT. ANN. Sections 6-1-101, et seq.) shall not apply to this Agreement or any disputes between the parties. Franchisee and FSI have negotiated regarding a forum in which to resolve any disputes that arise between them and have agreed to select a forum in order to promote stability in their relationship. Therefore, if a claim is asserted in any legal proceeding not subject to mandatory arbitration, as specified in Section 22.1, involving Franchisee, and the Franchisee Affiliates, on the one side, and FSI and the FSI Affiliates, on the other side, both parties agree that the exclusive venue for disputes between them shall be in the state and federal courts of Colorado, and each waive any objection either may have to the personal jurisdiction of or venue in the state and federal courts of Colorado. Notwithstanding the foregoing, any legal proceeding by FSI or any FSI Affiliate not subject to mandatory arbitration may be brought in any court of competent jurisdiction in the country, state, province, or other geographic area in which the FAT SHACK Restaurant is located or in which Franchisee or any Franchisee Affiliate resides or owns assets. IF A CLAIM MAY BE BROUGHT IN COURT, THEN FSI, THE FSI AFFILIATES, FRANCHISEE AND THE FRANCHISEE AFFILIATES EACH WAIVE THEIR RIGHTS TO A TRIAL BY JURY.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
Based on the 2025 Fat Shack Franchise Disclosure Document, the standard agreement dictates that disputes will be governed by Colorado law and resolved in Colorado courts. However, this may be modified by state-specific addenda. For instance, Indiana law dictates that disputes related to violations of the Indiana Franchises Act or the Indiana Deceptive Franchise Practices Act will be governed by those specific laws, while all other matters are subject to Colorado law. Furthermore, Fat Shack can bring legal proceedings in any competent court where the Fat Shack restaurant is located, or where the franchisee resides or owns assets.
For a prospective Fat Shack franchisee in Illinois, it's crucial to check for an Illinois-specific addendum within the Franchise Disclosure Document. This addendum would outline any modifications to the standard agreement necessitated by Illinois law, including specifics on dispute resolution, governing law, and venue. Without this addendum, the standard agreement mandating Colorado law and courts would likely apply, potentially requiring franchisees to travel out of state for legal proceedings.
It is important to note that the excerpts provided do not contain an Illinois addendum. Therefore, a prospective franchisee should confirm with Fat Shack whether an Illinois addendum exists and what specific provisions it contains regarding jurisdiction, venue, and governing law. Understanding these details is essential for assessing the legal and financial implications of franchise ownership in Illinois.