Under what conditions can a franchisee commence an arbitration proceeding or other action against Spray Net?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Registration of franchises or filings of offering circulars in other states. As of the date of filing of this | |----------------------------------|----------------------------------------------------------------------------------------------------------------------------| | 1. following states: | A franchise registration is effective or an offering circular is on file in the | | 2. states: | A proposed registration or filing is or will be shortly on file in the following | | 3. | No states have refused, by order or otherwise to register thesefranchises. | | 4. | No states have revoked or suspended the right to offer thesefranchises. The proposed registration of these franchises has not been withdrawn in any state. |
SPRAY-NET INC. ILLINOIS ADDENDUM TO THE DISCLOSURE DOCUMENT
To the extent the Illinois Franchise Disclosure Act, III. Comp. Stat. §§705/1 – 705/44 applies, the terms of this Addendum apply.
Item 17, Additional Disclosures. The following statements are added to Item 17:
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 of venue outside the State of Illinois is void. However, a franchise agreement may provide for arbitration outside of Illinois.
Section 41 of the Illinois Franchise Disclosure Act provides that 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.
Your rights upon termination and non-renewal of a franchise agreement are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.
The following is a revision to Item 5 of the Disclosure Document:
Due to our financial condition, the Illinois Attorney General's Office requires that the payment of initial fees be deferred until franchisor has satisfied its pre-opening obligations to franchisee and the franchise is open for business.
No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on behalf of the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
SPRAY-NET INC. ILLINOIS ADDENDUM TO THE FRANCHISE AGREEMENT
The following are revisions to the Franchise Agreement:
-
- Definitions.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the ability of a franchisee to commence an arbitration proceeding or other action against Spray Net is subject to certain state-specific laws and conditions. For instance, the Illinois Addendum specifies that while the franchise agreement can provide for arbitration outside of Illinois, any provision designating jurisdiction or venue outside of Illinois is void. Additionally, any attempt to waive compliance with the Illinois Franchise Disclosure Act or other Illinois laws is also void. However, a franchisee is not prevented from entering into a settlement agreement or executing a general release regarding a potential or actual lawsuit, nor is arbitration of any claim under Title 9 of the United States Code prohibited.
The Maryland Addendum clarifies that any provision in the agreement that provides a period of limitations for causes of action does not apply to causes of action under the Maryland Franchise Law. Franchisees in Maryland must bring an action under such law within three years after the grant of the franchise. Furthermore, franchisees in Maryland retain the right to file a lawsuit alleging a cause of action arising under the Maryland Franchise Law in any court of competent jurisdiction within the state, regardless of any conflicting provision in the agreement.
In both Maryland and Illinois, no statement, questionnaire, or acknowledgment signed by a franchisee in connection with starting the franchise can waive claims under applicable state franchise laws, including fraud in the inducement, or disclaim reliance on statements made by Spray Net or its representatives. This provision overrides any other conflicting terms in any document related to the franchise agreement, ensuring that franchisees retain their legal rights and protections under state laws.