What law will govern the interpretation and construction of the Stretch Zone Franchise Agreement in Illinois?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
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- ITEM 17, (v) and (w), respectively, are amended to add the following paragraphs:
- (v) Section 4 of the Illinois Franchise Disclosure Act dictates that any provision in a Franchise Agreement that designates jurisdiction or venue in a forum outside of this State is void as to any cause of action that otherwise is enforceable in this State, but a Franchise Agreement may provide for arbitration in a forum outside of this State.
- (w) Any governing law or choice of law clause granting authority to a state other than Illinois effectively negates the Illinois Franchise Disclosure Act. The Franchise Agreement will be interpreted and construed under Illinois law.
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- No statement, questionnaire, or acknowledgment 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 any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 91–99)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, for franchisees in Illinois, the Franchise Agreement will be interpreted and construed under Illinois law. This means that any disputes arising from the agreement will be subject to Illinois state laws, regardless of any conflicting clauses that might suggest otherwise.
This provision is particularly important because it protects Illinois franchisees from having to navigate legal systems in other states, which could be unfamiliar and potentially more costly. It ensures that local laws and regulations are applied, providing a level of legal certainty and protection.
Furthermore, the FDD explicitly states that any clause granting authority to a state other than Illinois effectively negates the Illinois Franchise Disclosure Act. This reinforces the commitment to upholding Illinois law within the franchise agreement, ensuring that franchisees' rights under the Act are not undermined. This also means that Illinois franchisees cannot waive compliance with any provision of the Illinois Franchise Disclosure Act or any other law of the state.