In the context of All Team franchises, what documents are subject to the Virginia Retail Franchising Act's provisions if the franchise is located in Virginia?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything contained in the foregoing Franchise Agreement, Area Development Agreement and Franchise Disclosure Document ("FDD") to the contrary, the following provisions of the Virginia Retail Franchising Act shall apply to any franchise or franchisee located in the State of Virginia, which shall control to the extent of any inconsistency:
The following is added to Item 17.h. of the FDD, and corresponding provisions in the Franchise Agreement and Area Development Agreement:
Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the Franchise Agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
No statement, questionnaire, or acknowledgement 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 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the Franchise Agreement, Area Development Agreement, and Franchise Disclosure Document (FDD) are subject to the provisions of the Virginia Retail Franchising Act for any franchise or franchisee located in Virginia. The Virginia Retail Franchising Act will control to the extent of any inconsistency with these documents.
Specifically, the FDD states that it is unlawful for All Team to cancel a franchise without reasonable cause, as defined by the Virginia Retail Franchising Act. If any grounds for default or termination stated in the Franchise Agreement do not constitute reasonable cause under Virginia law, that provision may not be enforceable.
Furthermore, any statement, questionnaire, or acknowledgment signed by a franchisee in connection with starting the franchise cannot waive claims under Virginia franchise law, including claims of fraud in the inducement. Additionally, franchisees cannot disclaim reliance on statements made by All Team or anyone acting on their behalf. This provision overrides any conflicting terms in any document related to the franchise.