Can a franchisee waive a claim of fraud in the inducement related to the All County franchise relationship?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
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 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, the franchise agreements for several states contain provisions that prevent franchisees from waiving claims of fraud in the inducement. Specifically, for franchisees in New York, Virginia, Illinois, California, and Maryland, no statement, questionnaire, or acknowledgment signed in connection with starting the franchise can waive claims under applicable state franchise law, including fraud in the inducement. This protection also extends to disclaiming reliance on statements made by All County or its representatives.
This means that All County franchisees in these states retain their legal rights to pursue claims of fraud if they believe they were misled into investing in the franchise. The FDD explicitly states that these provisions override any other conflicting terms in any document related to the franchise agreement. This ensures that franchisees cannot inadvertently or unknowingly give up their right to sue for fraud in the inducement through standard contract clauses.
However, it's important to note that these specific protections are explicitly mentioned only for franchisees in New York, Virginia, Illinois, California, and Maryland. The FDD does not specify whether similar protections exist for franchisees in other states. Prospective franchisees should carefully review the franchise agreement and any addenda applicable to their specific state to understand their rights and protections fully. It would be prudent to consult with a legal professional to clarify the enforceability of such waivers in their jurisdiction.