Can an All States M.E.D. franchisee disclaim reliance on franchisor statements?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 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 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the ability of a franchisee to disclaim reliance on statements made by the franchisor is subject to certain state laws. Specifically, addenda for Illinois, North Dakota, and New York state that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by the franchisor or their representatives. These provisions override any conflicting terms in other franchise documents.
This means that for All States M.E.D. franchises operating in Illinois, North Dakota, and New York, franchisees retain the right to pursue claims based on misrepresentations or fraudulent statements made by the franchisor, even if they have signed documents that appear to disclaim such reliance. This protection is designed to ensure that franchisees are not unfairly bound by agreements that could be based on misleading information provided by the franchisor.
For prospective All States M.E.D. franchisees, this information highlights the importance of understanding the specific franchise laws in their state. While the franchise agreement may contain certain disclaimers, these may not be enforceable in states with franchise-specific protections like those mentioned above. It is advisable for franchisees to consult with legal counsel to fully understand their rights and obligations under both the franchise agreement and applicable state laws.
It is important to note that these protections are specific to Illinois, North Dakota, and New York. The FDD does not specify whether other states have similar protections. Therefore, prospective franchisees in other states should investigate their state's franchise laws to determine whether they have similar protections.