Does an Alloy franchisee waive claims and offsets against amounts due under the agreement?

According to Alloy's 2025 Franchise Disclosure Document, franchisees and their owners/guarantors are limited in the time they have to assert claims against Alloy or its affiliates. Specifically, they cannot bring a claim related to the Franchise Agreement or the Alloy business after the shorter of either the applicable statute of limitations or one year from when the facts giving rise to the claim were discovered or should have been discovered. However, if the one-year limitation is prohibited by law, the claim must be brought within the applicable statute of limitations. This means a franchisee needs to be vigilant about identifying and pursuing any potential claims promptly.

This provision impacts a franchisee by potentially shortening the time they have to bring a legal claim against Alloy. While the typical statute of limitations might be longer, this clause imposes a one-year limit in many cases. The franchisee bears the responsibility of diligently monitoring the Alloy business and franchise relationship for any issues that could lead to a claim. Failure to act within the one-year period could result in forfeiting the right to sue, even if the general statute of limitations would have allowed more time.

However, the addendums for Maryland and other states modify this. For example, in Maryland, certain provisions in the agreement cannot act as a waiver of liability under the Maryland Franchise Registration and Disclosure Law. Similarly, disclaimers or statements signed by a franchisee cannot waive claims of fraud in the inducement or disclaim reliance on statements made by Alloy. Illinois also has an addendum that addresses waivers, stating that any provision purporting to bind a person to waive compliance with the Illinois Franchise Disclosure Act is void. These state-specific addendums provide some protection to franchisees by preventing them from unknowingly waiving their rights under state franchise laws.

In addition, a California addendum states that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under any applicable state franchise law, including fraud in the inducement, or disclaim reliance on any statement made by Alloy or its representatives. This provision supersedes any other term in any document executed in connection with the franchise. This ensures that franchisees in these states retain their rights to pursue claims under state franchise laws, regardless of any waivers or disclaimers in the franchise agreement.