Can an All States M.E.D. franchisee waive claims under state franchise law, including fraud in the inducement, by signing a statement?
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, a franchisee cannot waive claims under state franchise law, including fraud in the inducement, by signing a statement, questionnaire, or acknowledgment related to the commencement of the franchise relationship. This protection is explicitly stated and supersedes any other conflicting terms in any document executed in connection with the franchise. This provision is applicable in Illinois and New York.
This means that even if an All States M.E.D. franchisee signs a document that appears to waive their rights to bring claims under state franchise law, that waiver will not be enforceable. This is particularly important in cases of alleged fraud in the inducement, where a franchisee claims they were misled into entering the franchise agreement. The FDD ensures that franchisees retain their legal rights under state franchise laws, regardless of any statements they may have signed.
However, it's important to note that this protection may vary by state. For example, the North Dakota Addendum modifies several provisions of the standard agreement, but it also includes a clause stating that '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.' Therefore, prospective franchisees should carefully review the specific addendum for their state to understand the full scope of their rights and protections.
In summary, All States M.E.D. franchisees are generally protected from unknowingly waiving their rights under state franchise laws through signed statements or acknowledgments, especially concerning claims of fraud. However, franchisees should consult with a legal professional to fully understand their rights and the specific laws in their state.