Under what circumstances can a Pearce Bespoke franchisee enter into a settlement agreement despite the prohibition on waiving compliance with Illinois law?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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."
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, Illinois law includes provisions to protect franchisees, including a stipulation that any agreement requiring a franchisee to waive compliance with Illinois law is void. However, this protection does not completely prevent a Pearce Bespoke franchisee from entering into settlement agreements.
Specifically, a Pearce Bespoke franchisee can enter into a settlement agreement or execute a general release regarding a potential or actual lawsuit filed under any provisions of the Illinois Franchise Disclosure Act, despite the general prohibition on waiving compliance with the Act. This allows franchisees to resolve disputes through negotiated settlements without being forced to litigate every issue.
Additionally, the prohibition does not prevent the arbitration of any claim pursuant to the provisions of Title 9 of the United States Code. This means that Pearce Bespoke franchisees are still able to utilize arbitration, a common alternative dispute resolution method, to resolve conflicts, even if Illinois law generally prevents waivers of compliance. This provides flexibility in how disputes are handled, allowing for potentially quicker and less expensive resolutions.