Under what conditions will a release of claims executed by a Belocal franchisee exclude claims arising under the New York General Business Law?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- If Franchisee is required in the Agreement to execute a release of claims or to acknowledge facts that would negate or remove from judicial review any statement, misrepresentation, or action that would violate the General Business Law, regulation, rule, or order under New York law, such release will exclude claims arising under the New York General Business Law, Article 33, Section 680 through 695 and the regulations promulgated thereunder, and such acknowledgments will be void. It is the intent of this provision that non-waiver provisions of Sections 687.4 and 687.5 of the General Business Law be satisfied
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- If the Agreement requires that it be governed by the law of a state, other than the state of New York, the choice of law provision will not be considered to waive any rights conferred upon Franchisee under the New York General Business Law, Article 33, Sections 680 through 695.
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- 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, if a franchisee is required to execute a release of claims as part of the franchise agreement, and that release would negate or remove from judicial review any statement, misrepresentation, or action violating the New York General Business Law, then the release will specifically exclude claims arising under the New York General Business Law, Article 33, Sections 680 through 695. This provision ensures that the non-waiver provisions of Sections 687.4 and 687.5 of the General Business Law are upheld.
This means that Belocal franchisees in New York cannot be forced to sign away their rights to pursue claims under the New York General Business Law. This law provides certain protections to franchisees, and this clause ensures those protections remain in place. The FDD also states that any acknowledgments that would negate these rights will be considered void.
Furthermore, if the franchise agreement states that it is governed by the laws of a state other than New York, this choice of law will not waive any rights conferred upon the franchisee under the New York General Business Law, Article 33, Sections 680 through 695. Additionally, any statement, questionnaire, or acknowledgment signed by a franchisee in connection with starting the franchise cannot waive claims under any applicable state franchise law, including claims of fraud in the inducement, or disclaim reliance on statements made by Belocal or its representatives. This provision supersedes any other conflicting terms in any document related to the franchise agreement.