Can an Alloy franchisee waive a claim of fraud in the inducement through any disclaimer, questionnaire, clause, or statement signed in connection with the commencement of the franchise relationship?

According to Alloy's 2025 Franchise Disclosure Document, a franchisee cannot waive a claim of fraud in the inducement through any disclaimer, questionnaire, clause, or statement signed when starting the franchise relationship. This protection applies whether the fraud claim is based on common law or statutory grounds. This means that Alloy franchisees retain the right to pursue legal action if they believe they were fraudulently induced into investing in the franchise.

This provision also ensures that franchisees cannot disclaim reliance on statements or information provided by Alloy, its brokers, or other representatives if that information was a material factor in their decision to invest. This safeguards franchisees from being bound by clauses that might otherwise prevent them from claiming they relied on misleading information. The FDD explicitly states that this provision overrides any other conflicting terms in any document related to the franchise agreement.

This protection is a significant benefit for prospective Alloy franchisees, as it prevents Alloy from using contractual language to shield itself from liability for fraudulent misrepresentations. It aligns with franchise regulations in many states that aim to protect franchisees from overreaching by franchisors. Franchisees should still conduct thorough due diligence and seek legal counsel before investing, but this clause provides an additional layer of security against potential fraud.