Does the Bft Franchise Agreement allow a franchisee to disclaim reliance on statements made by the franchisor in connection with the commencement of the franchise relationship?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION]
The following provision applies if Developer or the franchise granted hereby are subject to the franchise registration or disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin: No statement, questionnaire, or acknowledgement signed or agreed to by a Developer 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 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 the franchisor, franchise seller, or anyone acting on their behalf regarding the commencement of the franchise relationship. 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 any statement, questionnaire, or acknowledgment signed by the franchisee cannot waive claims based on state franchise law, including fraud in the inducement. This clause takes precedence over any conflicting terms in any document related to the franchise agreement.
This provision is particularly important for prospective Bft franchisees as it ensures they cannot inadvertently waive their rights to pursue legal claims based on misrepresentations or fraudulent statements made during the franchise sales process. It provides a safeguard against high-pressure sales tactics or misleading information that could lead a franchisee to enter into an agreement that is not in their best interest.
For franchisees located, or whose studios will be located, in Hawaii, they should not sign the Representations and Acknowledgement Questionnaire.
This type of clause is not uncommon in franchise agreements, especially in states with strong franchise protection laws. It aims to balance the franchisor's need for standardized agreements with the franchisee's right to accurate and truthful information during the pre-sale period. Prospective franchisees should carefully review all documents and disclosures provided by Bft and seek legal counsel to fully understand their rights and obligations.