Does the California Addendum apply to all Amerispec Inspection Services franchisees, or only those in California?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF CALIFORNIA
The following information applies to franchises and Franchisees subject to the California Franchise Investment Act. Item numbers correspond to those in the main body:
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- THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.
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- Item 3. Item 3 is amended to provide that neither AmeriSpec nor any other person identified in Item 2 is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in such association or exchange.
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- Item 6. Item 6 is amended to note that the highest interest rate permitted by law in California is 10%.
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- Item 10. Item 10 is amended to note that before offering financing in California, AmeriSpec will obtain any licenses required under the California Financing Law, if any.
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- Item 17. The following disclosures are added to Item 17:
- A. The Franchise Agreement may contain a liquidated damages clause. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
- B. California Business & Professions Code Sections 20000 through 20043 provide rights to you concerning termination, transfer, or nonrenewal of a franchise. If the Franchise Agreement contains a provision that is inconsistent with the law, the law will control.
- C. SECTION 31125 OF THE CALIFORNIA CORPORATIONS CODE REQUIRES AMERISPEC TO GIVE THE FRANCHISEE A DISCLOSURE DOCUMENT, IN A FORM AND CONTAINING SUCH INFORMATION AS THE COMMISSIONER MAY BY RULE OR ORDER REQUIRE, PRIOR TO A SOLICITATION OF A PROPOSED MATERIAL MODIFICATION OF AN EXISTING FRANCHISE.
- D. The Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec.101 et seq.
- E. The Franchise Agreement requires you to sign a general release if you transfer your franchise. California Corporations Code 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code 31000 through 31516).
Business and Professions Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043).
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to the 2025 Amerispec Inspection Services Franchise Disclosure Document, the California Addendum applies specifically to franchisees subject to the California Franchise Investment Act. This means that the addendum is designed to address legal requirements and considerations that are specific to franchising within the state of California.
For a prospective Amerispec Inspection Services franchisee, this implies that if they are planning to operate their franchise in California, the terms and conditions outlined in the California Addendum will be directly applicable to their franchise agreement. These terms will modify or supplement the standard franchise agreement to ensure compliance with California law. If the franchisee is not operating in California, this addendum would not apply.
The addendum covers various aspects, including modifications to specific items in the main body of the FDD, such as Item 3 (regarding orders of securities associations), Item 6 (interest rates), Item 10 (financing licenses), and Item 17 (termination, transfer, or nonrenewal rights). It also addresses issues like liquidated damages clauses, waivers of rights under the Franchise Investment Law and Franchise Relations Act, and the franchisee's rights concerning termination, transfer, or nonrenewal of a franchise, all within the context of California law. Amerispec Inspection Services franchisees should carefully review this addendum with legal counsel to fully understand their rights and obligations under California law.