In Michigan, can a Beauty Bungalows franchisee be required to assent to a release that deprives them of rights and protections?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
MICHIGAN
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise:
(a) A prohibition on your right to join an association of franchisees.
(b) A requirement that you assent to a release, assignment, novation, waiver, or estoppel which deprives you of rights and protections provided in this act.
This shall not preclude you, after entering into a Franchise Agreement, from settling any and all claims.
- (c) A provision that permits us to terminate a Franchise prior to the expiration of itsterm exceptfor good cause.
Good cause shall include your failure to comply with any lawful provision of the FranchiseAgreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.
- (d) A provision that permits us to refuse to renew your Franchise without fairly compensatingyou by repurchase or other means for the fair market value at the time of expiration of your inventory, supplies, equipment, fixtures, and furnishings.
Personalized materials which have no value to us and inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the Franchise business are not subject to compensation.
This subsection applies only if: (i) the term of the Franchise is less than five years; and (ii) you are prohibited by the Franchise Agreement or other agreementfrom continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the Franchise or you do not receive at least six months' advance notice of our intent not to renew the Franchise.
- (e) A provision that permits us to refuse to renew a Franchise on terms generally available to other franchisees of the same class or type under similar circumstances.
This section does not require a renewal provision.
- (f) A provision requiring that arbitration or litigation be conducted outside the State of Michigan.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, Michigan law prohibits franchise agreements from containing certain unfair provisions. Specifically, if a Beauty Bungalows franchise agreement requires a franchisee to assent to a release, assignment, novation, waiver, or estoppel that deprives them of rights and protections provided under Michigan law, that provision is void and unenforceable.
This means that Beauty Bungalows cannot legally enforce any clause in its franchise agreement that forces a franchisee to give up their legal rights or protections under Michigan's franchise laws. However, the FDD clarifies that this does not prevent a franchisee from settling claims after entering into the Franchise Agreement.
For a prospective Beauty Bungalows franchisee in Michigan, this is a significant protection. It ensures that the franchisee cannot be forced to unknowingly or unwillingly surrender their rights through complex legal clauses in the franchise agreement. It is advisable for prospective franchisees to carefully review the franchise agreement with legal counsel to ensure full understanding of their rights and protections under Michigan law.