For a Belocal franchise in California, what is the potential impact of the amendment on the agreement's disclaimer of reliance?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
-
- OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION AT www.dfpi.ca.gov.
-
- You must sign a general release if you transfer your franchise. California Corporations Code Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31516). Business and Professions Code Section 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 through 20043).
-
- Corporations Code 31512 provides that: "Any conditions, stipulation, or provision purporting to bind any person acquiring a franchise to waive compliance with any provision of this law or any rule or order hereunder is void."
The Franchise Agreement requires a shortened statute of limitations period. Pursuant to Corporations Code Section 31512, this provision is void, to the extent that it is inconsistent with the provisions of Corporations Code Sections 31303 and 31304.
Any provision of a franchise agreement, franchise disclosure document, acknowledgement, questionnaire, or other writing, including any exhibit thereto disclaiming or denying any of the following shall be deemed contrary to public policy and shall be void and unenforceable:
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, California law provides specific protections for franchisees regarding reliance on representations made by the franchisor. The amendment to the Belocal franchise agreement for California states that any provision that disclaims or denies a franchisee's reliance on representations made by Belocal or its agents is against public policy and therefore void and unenforceable. This includes reliance on representations made in the Franchise Disclosure Document (FDD) itself.
For a prospective Belocal franchisee in California, this amendment is significant. It means that if the franchisee believes they were misled by statements or representations made by Belocal during the franchise sales process, they cannot be prevented from bringing a claim based on the argument that they signed an agreement disclaiming reliance on those statements. This protection extends to claims of fraud in the inducement, meaning a franchisee can argue they were fraudulently persuaded to enter the agreement based on misrepresentations.
This amendment strengthens the franchisee's position by ensuring that they are not bound by clauses that could prevent them from seeking legal recourse if they relied on misleading information from Belocal. It aligns the franchise agreement with California's franchise laws, which aim to protect franchisees from overreaching franchisors. This does not mean that all claims will be successful, but it does mean that Belocal franchisees in California have a greater ability to pursue legal remedies if they believe they were misled.