To what extent is each provision of the Illinois amendment to the Pearce Bespoke Franchise Agreement effective?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the requirements of the Illinois Franchise Disclosure Act, 815 ILCS §§ 705/1 et seq. (1987) (the "Act"), which govern the attached Board and Brush Creative Studio Franchise Agreement (the "Franchise Agreement"), the parties thereto agree as follows:
- To the extent of any inconsistences, the Franchise Agreement is hereby amended to further state:
"Section 4 of the Act provides that no franchisee shall be required to litigate any cause of action, with the exception of arbitration proceedings, arising under the Franchise Agreement or the Act outside of the State of Illinois."
- To the extent of any inconsistences, the Franchise Agreement is hereby amended to further state:
"Illinois law governs the terms of this Franchise Agreement."
- To the extent of any inconsistencies, the Franchise Agreement is hereby amended to further state:
"Section 41 of the Act provides that any condition, stipulation, or provision purporting to bind Franchisee to waive compliance with any provision of the Act, or any other Illinois law is void. The foregoing requirement, however, shall not prevent Franchisee from entering into a settlement agreement or executing a general release regarding a potential or actual lawsuit filed under any of the provisions of the Act, and shall not prevent the arbitration of any claim pursuant to the provisions of Title 9 of the United States Code."
- To the extent of any inconsistencies, the Franchise Agreement is hereby amended to further state:
"To the extent any provision regarding termination or renewal of the Franchise Agreement is inconsistent with the Illinois Franchise Disclosure Act §§ 815 ILCS §§ 705/19 and 705/20, the provisions of these sections of the Act will control."
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the Illinois amendment to the franchise agreement addresses specific provisions to ensure compliance with the Illinois Franchise Disclosure Act. Each provision within this amendment is effective only to the extent that the jurisdictional requirements of the Act are independently met, without relying on the amendment itself. This means that for each clause to be valid, it must separately align with Illinois law.
The amendment includes stipulations that modify the franchise agreement in several key areas. First, it ensures that franchisees are not required to litigate any cause of action outside of Illinois, except for arbitration proceedings. Second, it specifies that Illinois law governs the terms of the franchise agreement. Third, it voids any condition that would bind the franchisee to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law, although franchisees are not prevented from entering settlement agreements or arbitrating claims under federal law. Finally, it clarifies that the provisions of the Illinois Franchise Disclosure Act regarding termination and renewal will control if there are any inconsistencies with the franchise agreement.
Additionally, the FDD states that no statement, questionnaire, or acknowledgement signed by a franchisee can waive claims under Illinois franchise law, including fraud in the inducement, or disclaim reliance on behalf of Pearce Bespoke. This provision supersedes any other conflicting term in any document related to the franchise. These stipulations collectively aim to protect the rights of Pearce Bespoke franchisees within the state of Illinois and ensure adherence to Illinois law.