Can an All States M.E.D. franchisee waive claims under applicable state franchise law, including fraud in the inducement, via a signed statement in North Dakota?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
NORTH DAKOTA ADDENDUM TO THE FRANCHISE AGREEMENT
If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control.
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- 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 the 2024 All States M.E.D. Franchise Disclosure Document, a franchisee in North Dakota cannot waive claims under applicable state franchise law, including fraud in the inducement, through a signed statement, questionnaire, or acknowledgment made in connection with starting the franchise relationship. This protection is explicitly stated in the North Dakota Addendum to the Franchise Agreement. This provision overrides any other conflicting terms in any document related to the franchise.
This means that even if an All States M.E.D. franchisee signs a document that appears to waive their rights to make certain claims, such a waiver will not be enforced under North Dakota law. This is particularly important in cases of alleged fraud, where a franchisee might claim they were misled into investing in the franchise. The addendum ensures that franchisees retain their legal rights under North Dakota franchise law.
This protection is a significant benefit for prospective All States M.E.D. franchisees in North Dakota, as it prevents the franchisor from using contractual language to shield itself from liability for potential violations of state franchise law. It aligns with the intent of franchise laws, which are designed to protect franchisees from unfair practices and information asymmetry. This provision enhances the legal security of the franchisee's investment and business operation within the state.