How is Section 7.6 of the Mrcool Development Agreement amended regarding choice of law, mediation, arbitration, and jurisdiction?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
- Article 18.G. of the Franchise Agreement, and if Franchisee executes a Development Agreement, Section 7.6 of the Development Agreement, under the heading "Choice of Law, Non-Binding Mediation, Binding Arbitration, and Consent to Jurisdiction", shall be amended by the addition of the following statement added after the end of the last sentence of Article 18.G. of the Franchise Agreement and Section 7.6 of the Development Agreement:
Illinois Addendum: Illinois law governs the agreements between the parties to this franchise.
Section 4 of the Illinois Franchise Disclosure Act Provides that any provision in a Franchise Agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a Franchise Agreement may provide for arbitration in a venue outside Illinois.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to the 2025 Mrcool FDD, Section 7.6 of the Development Agreement, which addresses "Choice of Law, Non-Binding Mediation, Binding Arbitration, and Consent to Jurisdiction," is amended for Illinois franchisees. The amendment stipulates that Illinois law governs the agreements between the parties.
Furthermore, the Illinois Franchise Disclosure Act states that any provision in a Franchise Agreement designating jurisdiction or venue outside of Illinois is void. However, the agreement can still provide for arbitration in a venue outside Illinois. This means that while Mrcool can't force a franchisee into a legal venue outside of Illinois, arbitration outside the state is still a possibility.
This amendment ensures that Mrcool franchisees in Illinois are protected by Illinois law and have certain rights regarding jurisdiction and venue, aligning the franchise agreement with state regulations. It is important for prospective franchisees to understand these state-specific amendments, as they can significantly impact their legal rights and obligations under the franchise agreement.