factual

In connection with the commencement of the Basecamp Fitness franchise relationship, what claims cannot be waived by a franchisee under applicable state franchise law?

Basecamp_Fitness Franchise · 2025 FDD

Answer from 2025 FDD Document

ions of Item 17(v), titled "Choice of forum", and Item 17(w), titled "Choice of law":

The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York.

    1. Franchise Questionnaires and Acknowledgements 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.
    1. Receipts Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earlier of the first personal meeting, ten (10) business days before the execution of the franchise or other agreement, or the payment of any consideration that relates to the franchise relationship.

STATE SPECIFIC ADDENDUM AS REQUIRED BY THE NORTH DAKOTA FRANCHISE INVESTMENT LAW

Notwithstanding anything to the contrary in the Basecamp Fitness Franchisor LLC Franchise Disclosure Document, the following provisions shall supersede any inconsistent provisions and apply to all Basecamp Fitness franchises offered and sold in the state of North Dakota:

This North Dakota Addendum is only applicable if you are a resident of North Dakota or if your business will be located in North Dakota.

    1. The North Dakota Securities Commissioner has determined that it is unfair and unequitable under the North Dakota Franchise Investment Law for the franchisor to require the franchisee to sign a general release upon renewal of the Franchise Agreement. Therefore, the requirement that the franchisee signs a release upon renewal of the Franchise Agreement is deleted from Item 17c. and from any other place it appears in the Disclosure Document or in the Franchise Agreement.
    1. Item 17r. is revised to provide that covenants not to compete, such as those mentioned in Item 17r. of the Disclosure Document, are generally considered unenforceable in the state of North Dakota.
    1. The North Dakota Securities Commissioner has determined that it is unfair and unequitable under the North Dakota Franchise Investment Law for the franchisor to require the franchisee to consent to the jurisdiction of courts located outside of North Dakota. Therefore, any references in the Disclosure Document and in the Franchise Agreement are deleted and to any requirement that the franchisee consents to the jurisdiction of courts located outside of North Dakota are deleted.
    1. Any references in the Disclosure Document and in the Franchise Agreement and to any requirement to consent to a waiver of exemplary and punitive damages are deleted.
    1. Any references in the Disclosure Document and in the Franchise Agreement and to any requirement to consent to a waiver of trial by jury are deleted.
    1. Any claims arising under the North Dakota franchise law will be governed by the laws of the State of North Dakota.
    1. The prevailing party in any enforcement action is entitled to recover all costs and expenses, including attorneys' fees.
    1. Any references in the Disclosure Document and in the Franchise Agreement requiring franchisee to consent to termination penalties or liquidated damages are deleted.
    1. 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.

STATE SPECIFIC ADDENDUM AS REQUIRED BY THE RHODE ISLAND FRANCHISE INVESTMENT ACT

Notwithstanding anything to the contrary in the Basecamp Fitness Franchisor LLC Franchise Disclosure Document, the following provisions shall supersede any inconsistent provisions and apply to all Basecamp Fitness franchises offered and sold in the state of Rhode Island:

This Rhode Island Addendum is only applicable if you are a resident of Rhode Island or if your business will be located in Rhode Island.

§19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."

STATE SPECIFIC ADDENDUM AS REQUIRED BY THE VIRGINIA RETAIL FRANCHISING ACT

In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for Basecamp Fitness Franchisor LLC for use in the Commonwealth of Virginia shall be amended as follows:

  1. The following language is added to the end of the "Summary" section of Item 17 (e), entitled "Termination by franchise without cause":

Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the franchise agreement or area development agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchise Act or the laws of Virginia, that provision may not be enforceable.

  1. 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 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 51–55)

What This Means (2025 FDD)

According to the 2025 Basecamp Fitness Franchise Disclosure Document, several state-specific addenda clarify what rights a franchisee cannot waive when starting their franchise relationship. Specifically, in multiple states, including New York, Illinois, Hawaii, Maryland, and Minnesota, no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under applicable state franchise law. This explicitly includes claims related to fraud in the inducement or disclaiming reliance on statements made by Basecamp Fitness or its representatives. These provisions are designed to protect franchisees from unknowingly relinquishing their legal rights.

For prospective Basecamp Fitness franchisees, this means that any document they sign during the initial phase of establishing their franchise cannot be interpreted as a waiver of their rights under state franchise laws. This protection extends to instances where the franchisee might claim they were misled or defrauded into entering the agreement. The FDD emphasizes that these protections supersede any other conflicting terms in any document executed in connection with the franchise, reinforcing the importance of these state-specific safeguards.

It's important to note that these protections are specific to the laws of the states mentioned (New York, Illinois, Hawaii, Maryland and Minnesota) and apply only if the franchisee is a resident of or will operate their business in those states. Franchisees in other states should consult the specific addenda for their state, if any, to understand what waivers are unenforceable under their local franchise laws. This ensures that franchisees are fully aware of their rights and protections under the laws of their specific jurisdiction.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.