Can a statement signed by an All County franchisee waive any claim of fraud in the inducement?
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, in several states, a statement signed by a franchisee cannot waive claims of fraud in the inducement. For franchisees in New York, the franchise agreement specifies that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under any applicable state franchise law, including fraud in the inducement. This provision overrides any other conflicting terms in any document related to the franchise. The FDD also states that any sale made must comply with New York law, which requires the FDD to be provided at the earliest of the first personal meeting, ten business days before the execution of the franchise agreement, or the payment of any consideration related to the franchise relationship.
For franchisees subject to Virginia statutes and regulations, a similar provision exists, stating that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims of fraud in the inducement. This protection is also highlighted in the Franchise Agreement for the State of Virginia, reinforcing that franchisees cannot waive such claims. Similarly, for franchises in Illinois, no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under any applicable state franchise law, including fraud in the inducement.
In California, the addendum to the franchise agreement explicitly states that no disclaimer, questionnaire, clause, or statement signed by a franchisee can be interpreted as waiving any claim of fraud in the inducement. This protection extends to both common law and statutory fraud claims and disallows disclaiming reliance on statements made by the franchisor or their representatives. For franchises located in Maryland, the agreement specifies that representations requiring franchisees to release, estop, or waive liability do not act as a release, estoppel, or waiver of liability under the Maryland Franchise Registration and Disclosure Law. Additionally, no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims of fraud in the inducement in Maryland.