Menu
Blog Banner Image

The Franchise Memorandum

Illinois Court Denies Statute of Limitations Defense on Claims Under the Illinois Franchise Disclosure Act

The Illinois Franchise Disclosure Act (IFDA) imposes a one-year statute of limitations that begins to run when the franchisee becomes aware of facts or circumstances reasonably indicating a claim under the statute. In RWJ Mgmt. Co. v. BP Prods. N. Am., Inc., 2011 U.S. Dist. LEXIS 2928 (E.D. Ill. Jan. 12, 2011), franchisor BP filed a motion for summary judgment, asserting that the franchisees’ claims that BP had violated the IFDA registration requirements and committed fraud were barred because of the IFDA statute of limitations. BP argued that the limitations period began to run on the date the franchisees entered into the franchise agreement, which was more than a year before the lawsuit was filed. But the court disagreed. It found that under the IFDA, franchisees receive “a break on the statute of limitations” until they have had an opportunity to consult with an attorney regarding their claims. Because the franchisees met with an attorney within one year of suing, the court denied BP’s motion for summary judgment.

The court also denied BP’s motion for summary judgment on the franchisees’ claim that BP provided them with false earnings data in violation of the IFDA. Although BP provided a written disclaimer with its earnings disclosure, the court found the disclaimer did not protect BP because it only applied to projections of future performance. Since the franchisees claimed BP provided them with false data concerning past performance, the court denied summary judgment.

In a related ruling, the court also denied BP’s motion to exclude the franchisees’ expert witness testimony on the duty of good faith and fair dealing. RWJ Mgmt. Co. v. BP Prods. N. Am., Inc., 2011 U.S. Dist. LEXIS 2085 (E.D. Ill. Jan. 10, 2011).

Email LinkedIn Twitter Facebook

The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.

About this Publication

The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

To subscribe to monthly emails for The Franchise Memorandum, please click here

Topics

Archives

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

Blog Authors