Can an Alloy franchisee waive a claim of fraud in the inducement in Illinois?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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- No disclaimer, questionnaire, clause, or statement signed by a franchisee in connection with the commencement of the franchise relationship shall be construed or interpreted as waiving any claim of fraud in the inducement, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a material inducement to a franchisee's investment. This provision supersedes any other or inconsistent term of any document executed in connection with the franchise.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Illinois franchisees cannot waive claims of fraud in the inducement. Specifically, any disclaimer, questionnaire, clause, or statement signed by an Alloy franchisee at the start of their franchise relationship cannot be interpreted as a waiver of fraud claims. This protection applies whether the fraud claim is based on common law or statute.
This provision ensures that Alloy franchisees in Illinois retain their legal rights to pursue claims of fraud if they believe they were induced into investing in the franchise based on false or misleading information from Alloy or its representatives. The FDD explicitly states that this protection supersedes any other conflicting terms in any document related to the franchise agreement.
This safeguard is particularly important for prospective franchisees as it prevents Alloy from using contractual language to shield itself from liability for fraudulent behavior. It allows franchisees to rely on the information provided by Alloy during the pre-sale process without fear of inadvertently forfeiting their right to legal recourse if that information proves to be false or misleading. This protection aligns with the Illinois Franchise Disclosure Act, which aims to protect franchisees from unfair practices.