Illinois Franchise Law & FDD Registration

Yes. Illinois requires FDD registration before offering or selling a franchise in the state.

120 days after fiscal year-end; file your renewal before it expires.

$500 initial, $100 renewal, $100 material amendment ($25 immaterial).

The Illinois Attorney General’s Franchise Bureau.

Illinois Franchise Relationship Laws

Yes. Illinois has enacted franchise relationship laws that restrict and prohibit certain actions on the part of the franchisors. Below is a summary of some of Illinois' franchise relationship obligations and prohibitions:

• Trade Associations - In Illinois, it is illegal for a franchisor to prevent or restrict a franchisee from joining a trade association;
• No Disparate Treatment - In Illinois, it is illegal for a franchisor to “unreasonably and materially discriminate between franchisees operating a franchised business located in [Illinois] in the charges offered or made for franchise fees, royalties, goods, services, equipment, rentals or other advertising services, if such discrimination will cause competitive harm to a franchisee who competes with a franchisee that received the benefit of the discrimination….” Exceptions to this rule are limited, but do include disparate treatment based on the franchises being granted at different times, and other limited exceptions.
• Termination Restrictions - In Illinois, it is illegal to terminate a franchise without good cause. Generally, under Illinois law, good cause exists when a franchisee has been given a 30-day notice of a violation of the franchise agreement and the franchisee has not cured its default.
• Non-renewal Restrictions - Generally, in Illinois, it is unlawful to deny a franchisee renewal of its franchise in circumstances where the franchisee will be prohibited from operating a competing business after expiration of the original franchise agreement. Also, it is illegal to deny a franchisee renewal without giving the franchisee 6 months’ prior notice of your election to deny renewal.