In Michigan, what happens if certain unfair provisions are in the Beauty Bungalows franchise documents?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, Michigan law prohibits certain unfair provisions that are sometimes included in franchise documents. If any of these prohibited provisions are present in the Beauty Bungalows franchise documents, they are considered void and unenforceable against the franchisee.
The specific provisions that Michigan law deems void and unenforceable include prohibitions on a franchisee's right to join an association of franchisees, requirements that franchisees waive rights and protections under the act, and clauses allowing Beauty Bungalows to terminate a franchise before its term expires without good cause. Good cause is defined as the franchisee's failure to comply with the Franchise Agreement, provided they are given written notice and a reasonable opportunity (up to 30 days) to correct the failure.
Further, provisions that allow Beauty Bungalows to refuse franchise renewal without fairly compensating the franchisee for the fair market value of their inventory, supplies, equipment, fixtures, and furnishings are also void. This compensation does not extend to personalized materials or items not reasonably required for the franchise business. This subsection applies only if the franchise term is less than five years and the franchisee is restricted from operating a similar business in the same area after the franchise expires, or if they do not receive at least six months' notice of non-renewal. Provisions allowing Beauty Bungalows to refuse renewal on terms generally available to other franchisees are also unenforceable, although the document clarifies that a renewal provision is not required. Finally, any provision mandating that arbitration or litigation occur outside of Michigan is void.
This protection ensures that Beauty Bungalows franchisees in Michigan are not subject to unfair or overbearing contractual terms, providing a more balanced relationship between the franchisor and franchisee. Prospective franchisees should carefully review the franchise agreement and related documents to ensure compliance with Michigan law and consult with legal counsel if they have any concerns about potentially unfair provisions.