Can a franchisee disclaim reliance on behalf of the Franchisor in connection with the commencement of the Bang Cookies franchise relationship?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
In conformance with Section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiting any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance 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 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, specifically concerning the Illinois Franchise Disclosure Act, a franchisee cannot disclaim reliance on behalf of the franchisor in connection with starting the franchise relationship. The FDD states that no statement, questionnaire, or acknowledgement signed by a franchisee can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on the franchisor. This provision overrides any other conflicting terms in any document related to the franchise agreement. This protection is specifically tied to Illinois law.
This means that if a Bang Cookies franchisee in Illinois believes they were misled by the franchisor's representations when deciding to invest in the franchise, they retain the right to pursue legal claims against Bang Cookies. The franchisee's ability to claim reliance on the franchisor's statements is preserved, and any attempt to waive this right is void under Illinois law. This is a significant protection for franchisees, ensuring they can hold the franchisor accountable for their pre-sale conduct and representations.
For prospective Bang Cookies franchisees in Illinois, this clause offers a degree of security. It prevents Bang Cookies from enforcing waivers that would prevent franchisees from claiming they relied on misleading information provided by the franchisor. However, this protection is specific to Illinois and may not apply in other states. Franchisees should consult with legal counsel to understand their rights and protections under the laws of their specific state.