Does the Bft franchise agreement allow a franchisee to disclaim reliance on statements made by the franchisor or its representatives in connection with the commencement of the franchise relationship?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
CALIFORNIA
The registration of this franchise offering by the California Department of Financial Protection and Innovation does not constitute approval, recommendation, or endorsement by the Commissioner.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the franchise agreement does not allow a franchisee to disclaim reliance on statements made by Bft or its representatives regarding the commencement of the franchise relationship. Specifically, any statement, questionnaire, or acknowledgment signed by a franchisee cannot waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Bft, franchise sellers, or individuals acting on Bft's behalf. This provision takes precedence over any conflicting terms in any document related to the franchise agreement. This protection applies to franchisees in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, and Wisconsin.
This means that prospective Bft franchisees in the specified states are protected from being bound by any agreement that would prevent them from pursuing legal claims based on misrepresentations or fraudulent statements made by Bft during the franchise sales process. This ensures that franchisees can hold Bft accountable for the accuracy and truthfulness of the information provided to them when they were deciding whether to invest in a Bft franchise.
For franchisees located, or whose studio will be located, in Hawaii, they should not sign the Representations and Acknowledgement Questionnaire. This is a specific instruction highlighted in the FDD, indicating a heightened level of scrutiny or potential concern regarding the representations made during the franchise sales process in Hawaii. This instruction serves as an additional safeguard for franchisees in Hawaii, reinforcing the general protection against disclaiming reliance on franchisor statements.
This provision is beneficial for prospective franchisees as it prevents Bft from using contractual language to shield itself from liability for misrepresentations or fraudulent inducement. It aligns with franchise laws in several states that aim to protect franchisees from deceptive practices and ensure they have recourse if they are misled during the franchise sales process. Franchisees should still conduct thorough due diligence and seek legal counsel to fully understand their rights and obligations, but this clause provides an additional layer of protection.