Can a Beard Papas franchisee disclaim reliance on statements made by the franchisor or its representatives in connection with the franchise relationship?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
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) 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 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, a franchisee cannot disclaim reliance on statements made by the franchisor, franchise seller, or anyone acting on behalf of the franchisor in connection with the franchise relationship. This protection is in place to prevent franchisees from unknowingly waiving their rights based on misrepresentations or false promises made during the franchise sales process. This applies to any statement, questionnaire, or acknowledgment signed by the franchisee when starting the franchise. This provision overrides any conflicting terms in any document related to the franchise agreement. This protection is specifically highlighted in amendments to the FDD for franchisees in California, Michigan, Illinois, Minnesota, New York, and Virginia.
This means that if a Beard Papas franchisee believes they were induced into signing the franchise agreement based on false or misleading statements, they retain the right to pursue legal claims against Beard Papas, even if they signed a document seemingly waiving such claims. This protection extends to claims of fraud in the inducement, ensuring that franchisees are not bound by disclaimers that would prevent them from seeking legal recourse for misrepresentations. The FDD emphasizes the importance of state franchise laws in protecting franchisees' rights, and this provision reinforces that protection.
Prospective Beard Papas franchisees should be aware of this protection as it provides an added layer of security during the franchise purchase process. It ensures that the franchisee can hold Beard Papas accountable for any representations made during the sales process. However, franchisees should still conduct thorough due diligence and seek independent legal advice before signing any franchise agreement to fully understand their rights and obligations. This clause does not replace the need for careful investigation and informed decision-making but rather supplements it by preventing the franchisor from using disclaimers to avoid liability for misrepresentations.