Regarding Bhc, can a franchisee waive claims under any applicable franchise law, including fraud in the inducement, by signing a statement, questionnaire, or acknowledgment?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Under California Corporations Code section 31512, these provisions are not enforceable in California for any claims you may have under the California Franchise Investment Law.
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- 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 (1) waiving any claims under any applicable 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 or any document executed in connections with the franchise.
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- California's Franchise Investment Law (Corporations Code section 31512 and 31512.1) states that any provision of a franchise agreement or related document requiring the franchisee to waive specific provisions of the law is contrary to public policy and is void and unenforceable. The law also prohibits a franchisor from disclaiming or denying (i) representations it, its employees, or its agents make to you, (ii) your ability to rely on any representations it makes to you, or (iii) any violations of the law.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a franchisee's ability to waive claims under franchise law by signing certain documents is restricted, particularly in California. Specifically, any statement, questionnaire, or acknowledgment signed by a Bhc franchisee cannot waive claims under any applicable franchise law, including claims of fraud in the inducement. This means that even if a franchisee signs a document that appears to waive these rights, the waiver is not legally enforceable.
This protection is reinforced by California's Franchise Investment Law, which states that any provision in a franchise agreement or related document that requires a franchisee to waive specific provisions of the law is against public policy and therefore void. The law also prevents Bhc from disclaiming representations made to the franchisee, denying the franchisee's ability to rely on those representations, or disclaiming any violations of the law.
For a prospective Bhc franchisee, this means that certain legal rights are protected by state law and cannot be signed away. This provides an added layer of security, especially in regulated states like California, against potentially overreaching franchisor actions. Franchisees should still consult with an attorney to fully understand their rights and obligations, but this provision ensures that certain fundamental protections remain in place.