For a Belocal franchise in California, what is the effect of the amendment on the franchisee's ability to disclaim reliance on statements made by the franchisor?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- g. 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, California franchisees are protected by an amendment that prevents them from waiving claims or disclaiming reliance on statements made by the franchisor. Specifically, any statement, questionnaire, or acknowledgment signed by a franchisee cannot waive claims under state franchise law, including claims of fraud in the inducement. This also means a franchisee cannot disclaim reliance on any statement made by Belocal, its franchise seller, or anyone acting on Belocal's behalf. This amendment overrides any conflicting terms in other franchise documents.
This provision is significant for prospective Belocal franchisees in California because it strengthens their legal position. It ensures that franchisees cannot inadvertently waive their rights to pursue claims against the franchisor based on misrepresentations or fraud. The amendment aims to protect franchisees from being bound by clauses that might force them to disclaim reliance on information provided by Belocal during the franchise sales process.
In essence, this amendment creates a safeguard for Belocal franchisees in California, ensuring they retain the ability to hold Belocal accountable for statements made during the franchise sales process. This protection aligns with California's franchise laws, which prioritize franchisee rights and fair dealing. Prospective franchisees should still consult with legal counsel to fully understand their rights and the implications of this amendment.