Does the Bombs Away franchise agreement prevent a franchisee from settling any and all claims after the agreement has been signed?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 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 Business and Professions Code Sections 20000 through 20043 provide rights to the franchisee concerning termination, transfer, or non-renewal of a franchise. If the Franchise Agreement contains a provision that is inconsistent with the law, the law will control.
A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
- Minnesota Rules 2860.4400(D) prohibits a franchisor from requiring a franchisee to assent to a general release.
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to the 2024 Bombs Away FDD, the franchise agreement's impact on a franchisee's ability to settle claims varies by state. In California and Washington, certain protections are in place regarding the waiver of rights and settlement of claims.
Specifically, in California, no statement signed by a franchisee can waive claims under state franchise law, including fraud, or disclaim reliance on statements made by Bombs Away or its representatives. This provision overrides any conflicting terms in the franchise agreement. Additionally, California law provides rights to franchisees concerning termination, transfer, or non-renewal, and the law will take precedence over any inconsistent provisions in the franchise agreement.
In Washington, a franchisee's release or waiver of rights cannot include rights under the Washington Franchise Investment Protection Act unless it's part of a negotiated settlement after the agreement is in effect and both parties have independent counsel. Provisions that unreasonably restrict the statute of limitations or rights to a jury trial may not be enforceable. Bombs Away franchisees should be aware of these state-specific protections and consult with legal counsel to understand their rights fully.
In Minnesota, the FDD states that Minnesota Rules 2860.4400(D) prohibits Bombs Away from requiring a franchisee to assent to a general release.