Which law governs arbitration matters related to the Monicals Pizza Franchise Agreement?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
| between Monical Pizza Corporation and | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and | |
|---|---|---|
| 1. | Illinois law governs the Franchise Agreement. | |
| 2. | agreement may provide for arbitration to take place outside of Illinois. | In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise |
| 3. | with the Illinois Franchise Disclosure Act or any other law of Illinois is void. | Your rights upon Termination and Non-Renewal of an agreement are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act. In conformance with section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance |
| 4. | RENEWAL TERM) TO BRING YOUR RESTAURANT INTO COMPLIANCE. | IF THE FRANCHISOR DECIDES TO MAKE CHANGES TO ITS SYSTEM (SUCH AS NEW EQUIPMENT, FIXTURES, SOFTWARE AND/OR TRADEMARKS), YOU MAY BE REQUIRED TO SPEND UP TO $50,000 DURING THE 5-YEAR TERM OF YOUR FRANCHISE AGREEMENT (AS WELL AS EACH 5-YEAR |
| understands and consents to be bound by all of its terms. | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum and | |
| MONICAL PIZZA CORPORATION: | Developer: | |
| By: | By: | |
| Title: | Title: |
| 1. | Development Agreement for Monical Pizza Corporation is amended as follows: | In recognition of the requirements of the California Franchise Investment Law, Cal. Corp. Code | |
|---|---|---|---|
| §§31000-3516 and the California Franchise Relations Act, Cal. Bus. And Prof. Code §§20000-20043, the Area | |||
| and non-renewal. | Section 8 of the Area Development Agreement contains provisions concerning termination If these provisions are inconsistent with California Business and Professions Code Sections 2000 through 20043, California law will control. | ||
| | Section 9.4 of the Area Development Agreement contains a covenant not to compete that | ||
| covenant may not be enforceable under California law. | extends beyond the expiration or termination of the Area Development Agreement; this | ||
| | The Area Development Agreement may require litigation to be conducted in a court located | ||
| action arising under California law. | outside of the State of California. This provision might not be enforceable for any cause of | ||
| | The Area Development Agreement requires application of the laws of a state other than | ||
| California. This provision might not be enforceable under California law. | |||
| Agreement restricting venue to a forum outside of the State of California. | Section 13.7 of the Area Development Agreement requires binding arbitration. arbitration shall occur at the forum indicated in Section 13.7. Prospective developers are encouraged to consult legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of the Area Development | The | |
| 2. | To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of | ||
| said Area Development Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern. | |||
| understands and consents to be bound by all of its terms. | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum, and | ||
| MONICAL PIZZA CORPORATION: | Developer: |
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, Illinois law generally governs the Franchise Agreement. However, there are specific stipulations for franchisees in Illinois and California regarding arbitration. For Illinois franchisees, any provision in the franchise agreement that designates jurisdiction and venue in a forum outside of Illinois is void, although the agreement may provide for arbitration to take place outside of Illinois.
For California franchisees, the Area Development Agreement requires binding arbitration, and such arbitration shall occur at the forum indicated in Section 13.7 of the Area Development Agreement. However, prospective developers are encouraged to seek legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of the Area Development Agreement restricting venue to a forum outside of the State of California.
These stipulations mean that while Monicals Pizza generally uses Illinois law, franchisees need to be aware of potential conflicts with state-specific franchise laws, especially concerning where arbitration can take place and the enforceability of certain provisions. Franchisees should consult with legal counsel to understand how these laws affect their rights and obligations under the Franchise Agreement.