Does the Belocal franchise agreement allow a franchisee to disclaim reliance on statements made by the franchisor or their representatives?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
The following statement is added to the Agreement: 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 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the franchise agreement includes provisions that address the franchisee's reliance on statements made by the franchisor. Specifically, the agreement states that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under state franchise law, including fraud, or disclaim reliance on statements made by the franchisor or their representatives. This clause is designed to supersede any other conflicting terms within the franchise documents. This protection is included in amendments to the franchise agreement for franchisees in Illinois and New York.
This means that Belocal franchisees are protected from unknowingly waiving their rights to pursue claims based on misrepresentations made by Belocal during the franchise sales process. This is a crucial safeguard, as it ensures that franchisees can hold Belocal accountable for the accuracy of the information provided to them. It prevents Belocal from using fine print or standardized forms to shield themselves from liability for misleading statements.
However, it is important to note that these protections may vary by state. For example, the FDD includes specific clauses that apply to franchisees in California and states other than Washington, indicating that the enforceability and interpretation of these provisions can depend on local laws. While some sections of the agreement may ask the franchisee to acknowledge they are not relying on any representations made by Belocal, these acknowledgments may not be enforceable in certain jurisdictions due to franchise laws.
Prospective Belocal franchisees should carefully review the Item 22 section of the FDD and consult with an attorney to fully understand their rights and protections under the franchise agreement, particularly concerning reliance on representations made by Belocal and its representatives. Understanding these provisions is essential for making an informed decision about investing in a Belocal franchise.