In Illinois, can a Ledgers franchise agreement provide for arbitration to take place outside of Illinois?

According to Ledgers's 2025 Franchise Disclosure Document, for franchises governed by the Illinois Franchise Disclosure Act, a franchise agreement can stipulate that arbitration occurs outside of Illinois. This means that if a dispute arises between Ledgers and a franchisee in Illinois, the arbitration proceedings may be required to take place in a different state, depending on what the franchise agreement specifies.

While Illinois law dictates that any provision designating jurisdiction and venue for legal proceedings outside of Illinois is void, there is an exception carved out for arbitration. This distinction is important because it means Ledgers can enforce a clause requiring arbitration to occur in a location that may be more convenient or advantageous for them, potentially increasing costs and logistical challenges for the franchisee.

Prospective franchisees in Illinois should carefully review the arbitration clause in the Ledgers franchise agreement and consider the implications of having to travel out of state for arbitration. It would be prudent to consult with a legal professional to fully understand their rights and obligations under the agreement, especially concerning dispute resolution processes and the potential costs associated with arbitrating outside of Illinois.