Does the Alloy rider allow a franchisee to disclaim reliance on statements made by the franchisor?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
The following language is hereby added to the end of the FDD, Agreement and Area Development Agreement (if applicable): "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 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the addenda for several states clarify that franchisees cannot disclaim reliance on statements made by the franchisor. Specifically, for franchisees in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin, a rider explicitly states that no statement signed by a franchisee can disclaim reliance on any statement made by Alloy or anyone acting on its behalf. This provision overrides any conflicting terms in other documents related to the franchise agreement.
For franchisees in Minnesota, Illinois, and Maryland, the FDD includes similar stipulations within their respective state-specific addenda. These addenda specify that no disclaimer, questionnaire, or statement signed by a franchisee can be interpreted as disclaiming reliance on statements made or information provided by Alloy or its representatives, especially if such statements were a material inducement to the franchisee's investment. Again, these provisions supersede any other inconsistent terms in the franchise documents.
These clauses are designed to protect franchisees by ensuring they can hold Alloy accountable for representations made during the franchise sales process. This prevents Alloy from using disclaimers to avoid liability for misleading or fraudulent statements. Prospective franchisees should carefully review these addenda to understand their rights and protections under the franchise agreement, particularly concerning reliance on information provided by the franchisor.