Under what circumstances can a release in the Alloy Franchise Agreement NOT relieve the franchisor from liability?

According to Alloy's 2025 Franchise Disclosure Document, there are specific state laws that limit the enforceability of release, estoppel, or waiver clauses within the franchise agreement. These clauses are generally intended to protect Alloy from liability. However, the FDD stipulates that these protections do not extend to liability incurred under certain state franchise laws. Specifically, the California Franchise Investment Law, the Maryland Franchise Registration and Disclosure Law, the Illinois Franchise Disclosure Act, and the Franchise Investment Protection Act of Washington are called out as examples where such releases are invalid. This means that even if a franchisee signs a document intending to release Alloy from liability, that release will not be effective if the liability arises from violations of these state franchise laws.

Furthermore, the addendum for Minnesota franchisees provides additional protections. No release language in the Alloy Franchise Agreement can relieve Alloy from liability imposed by Minnesota's laws concerning franchising. However, this does not prevent voluntary settlements of disputes. Additionally, any disclaimer, questionnaire, clause, or statement signed by a franchisee cannot be interpreted as waiving claims of fraud in the inducement or disclaiming reliance on statements made by Alloy that induced the franchisee's investment. This provision overrides any conflicting terms in other documents related to the franchise agreement.

For prospective Alloy franchisees, this means that certain rights and protections under state franchise laws cannot be waived, regardless of what the franchise agreement may state. This is a significant benefit, as it ensures that franchisees retain legal recourse in cases of fraud, misrepresentation, or violations of state franchise regulations. Franchisees should be aware of the specific protections afforded to them by the laws of their state and consult with an attorney to fully understand their rights. These stipulations are common in franchise agreements to comply with varying state regulations and protect franchisees from unknowingly waiving their legal rights.