Is a provision in the Southern Steer Franchise or Multi-Unit Development Agreement that designates jurisdiction and venue in a forum outside of Illinois valid?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in the Franchise or Multi-Unit Development Agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise or multi-unit development agreement may provide for arbitration to take place outside of Illinois.
Franchisees' rights upon Termination and Non-Renewal 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 with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, any provision within the Franchise or Multi-Unit Development Agreement that designates jurisdiction and venue in a forum outside the State of Illinois is considered void. This is in direct conformance with Section 4 of the Illinois Franchise Disclosure Act, which aims to protect franchisees operating within Illinois. However, the agreement can stipulate that arbitration may occur outside of Illinois.
This means that if a dispute arises and a Southern Steer franchisee in Illinois sues Southern Steer, the lawsuit must take place within Illinois, regardless of what the franchise agreement might otherwise state. This provision ensures that Illinois franchisees are not forced to litigate in a distant or inconvenient forum. However, it's important to note that while litigation must occur in Illinois, the agreement can still require arbitration to take place elsewhere.
Furthermore, the FDD states that any condition, stipulation, or provision that attempts to bind a person acquiring a Southern Steer franchise to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is void, as per section 41 of the Illinois Franchise Disclosure Act. This reinforces the protection afforded to franchisees under Illinois law, preventing them from unknowingly or unwillingly surrendering their legal rights.