Does the Auntie Annes franchise agreement allow franchisees to waive reliance on representations made in the most recent FDD?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
nual earnings exceed $100,000 (an amount that will be adjusted annually); (2) an independent contractor non-compete covenant is unenforceable unless the independent contractor's annual earnings exceed $250,000; (3) a presumption is created that any non-compete covenant with a duration longer than 18 months is unreasonable and unenforceable; and (4) any contractual provision that requires an employee to adjudicate a noncompetition covenant outside of Washington State is void and unenforceable.
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- Chapter 49.62.060 RCW prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor. As a result, any such provisions contained in the Franchise Agreement or elsewhere are void and unenforceable in Washington.
EXHIBIT I FRANCHISEE DISCLOSURE ACKNOWLEDGEMENT
FRANCHISEE DISCLOSURE ACKNOWLEDGEMENT
THIS ACKNOWLEDGEMENT SHALL NOT BE COMPLETED BY YOU, AND WILL NOT APPLY, IF THE OFFER OR SALE OF THE FRANCHISE IS SUBJECT TO THE STATE FRANCHISE DISCLOSURE LAWS IN THE STATES OF CALIFORNIA, HAWAII, ILLINOIS, INDIANA, MARYLAND, MICHIGAN, MINNESOTA, NEW YORK, NORTH DAKOTA, RHODE ISLAND, SOUTH DAKOTA, VIRGINIA, WASHINGTON, OR WISCONSIN.
IF THE FRANCHISE IS TO BE OPERATED IN, OR YOU ARE A RESIDENT OF, MARYLAND, DO NOT SIGN THE ACKNOWLEDGEMENT.
As you know, Auntie Anne's Franchisor SPV LLC ("we") and the franchisee identified below ("you") are preparing to enter into an Auntie Anne's® Franchise Agreement (the "Franchise Agreement") for the operation of an Auntie Anne's® franchise. The purpose of this Acknowledgement is to determine whether any statements or promises were made to you that we have not authorized or that may be untrue, inaccurate or misleading, to be certain that you have been properly represented in this transaction, and to be certain that you understand the limitations on claims you may make by reason of the purchase and operation of your franchise. You cannot sign or date this Acknowledgement the same day as the Receipt for the Franchise Disclosure Document, but you must sign and date it the same day you sign the Franchise Agreement and pay your franchise fee.
Please review each of the following statements carefully and initial by each providing your acknowledgement that the statement is accurate and true. If you find that a statement is not accurate and true, please cease signing this Acknowledgement and related documents and immediately e-mail Tim Goodman, Senior Vice President of Franchise Administration, at tgoodman@gotofoods.com and provide an explanation of why you believe such statement is not accurate and true.
| Initial | 1. | You have received and personally reviewed the Franchise Disclosure Document ("Disclosure Document") and the Franchise Agreement and each exhibit and schedule attached to them. |
|---|---|---|
| Initial | 2. |
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to the 2024 Auntie Annes Franchise Disclosure Document, the franchise agreement includes an acknowledgement section where franchisees confirm the accuracy and truthfulness of statements regarding the franchise offering. This acknowledgement requires franchisees to confirm that no unauthorized or untrue statements were made to them and that they understand the limitations on claims they can make related to their franchise purchase and operation.
Specifically, franchisees must acknowledge that no employee or representative of Auntie Annes made statements about potential profits, earnings, or success that are not included in the Franchise Disclosure Document (FDD) or that contradict the information in the FDD. Franchisees also acknowledge that the Franchise Agreement constitutes the entire agreement between them and Auntie Annes, meaning any prior oral or written statements not included in the agreement are not binding.
However, the FDD includes addenda for Illinois and Maryland franchisees that modify these terms. For Illinois franchisees, Section 21.1 (Your Acknowledgements) is deleted from the Franchise Agreement, and any provision that would waive compliance with the Illinois Franchise Disclosure Act is void. For Maryland franchisees, the FDD states, "IF THE FRANCHISE IS TO BE OPERATED IN, OR YOU ARE A RESIDENT OF, MARYLAND, DO NOT SIGN THE ACKNOWLEDGEMENT.", and the general release is not intended to relieve Auntie Annes from liability imposed by the Maryland Franchise Registration and Disclosure Law. These stipulations protect franchisees in those states from unintentionally waiving rights or claims based on information outside the Franchise Agreement or the FDD.