Regarding Belocal franchises in Hawaii, can a franchisee waive claims under any applicable state franchise law, including fraud in the inducement, through any statement, questionnaire, or acknowledgment?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
HAWAII ADDENDUM TO THE FRANCHISE DISCLOSURE DOCUMENT
THESE FRANCHISES WILL BE/HAVE BEEN FILED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF HAWAII. FILING DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE DIRECTOR OF COMMERCE AND CONSUMER AFFAIRS OR A FINDING BY THE DIRECTOR OF COMMERCE AND CONSUMER AFFAIRS THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE AND NOT MISLEADING.
THE FRANCHISE INVESTMENT LAW MAKES IT UNLAWFUL TO OFFER OR SELL ANY FRANCHISE IN THIS STATE WITHOUT FIRST PROVIDING TO THE PROSPECTIVE FRANCHISEE, AT LEAST SEVEN DAYS PRIOR TO THE EXECUTION BY THE PROSPECTIVE FRANCHISEE OF ANY BINDING FRANCHISE OR OTHER AGREEMENT, OR AT LEAST SEVEN DAYS PRIOR TO THE PAYMENT OF ANY CONSIDERATION BY THE FRANCHISEE, WHICHEVER OCCURS FIRST, A COPY OF THE FRANCHISE DISCLOSURE DOCUMENT, TOGETHER WITH A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE.
THIS FRANCHISE DISCLOSURE DOCUMENT CONTAINS A SUMMARY ONLY OF CERTAIN MATERIAL PROVISIONS OF THE FRANCHISE AGREEMENT. THE CONTRACT OR AGREEMENT SHOULD BE REFERRED TO FOR A STATEMENT OF ALL RIGHTS, CONDITIONS, RESTRICTIONS AND OBLIGATIONS OF BOTH THE FRANCHISOR AND FRANCHISEE.
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, a franchisee in Hawaii cannot waive claims under any applicable state franchise law, including claims of fraud in the inducement. This protection extends to any statement, questionnaire, or acknowledgment signed in connection with starting the franchise relationship. This means that even if a franchisee signs a document that appears to waive these rights, that waiver will not be legally effective.
This provision is explicitly stated in the Hawaii Addendum to the Franchise Disclosure Document. It ensures that franchisees retain their legal rights under Hawaii state law, regardless of any agreements or statements made during the franchise commencement. This is a significant protection for franchisees, as it prevents Belocal from using contractual language to circumvent state franchise laws.
The FDD also emphasizes that the franchise will be filed under the Franchise Investment Law of the State of Hawaii. However, the filing does not mean that the Director of Commerce and Consumer Affairs approves, recommends, or endorses the franchise, nor does it mean that the Director finds the information provided is true, complete, and not misleading. This serves as a reminder that prospective franchisees should still conduct their own due diligence and seek independent legal advice before investing in a Belocal franchise.
This non-waiver provision is common in franchise agreements to protect franchisees from unknowingly giving up their rights. The Belocal FDD clearly states that this provision overrides any other conflicting terms in any document related to the franchise agreement, reinforcing the importance of this protection for franchisees in Hawaii.