In Michigan, does the prohibition on unfair provisions in Bombs Away franchise documents apply to all documents related to the franchise?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
ms arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
You have the right to file a lawsuit alleging a cause of action arising under the Maryland Franchise Law in any court of competent jurisdiction in the State of Maryland.
The Franchise Agreement provides for termination upon bankruptcy of the franchisee. This provision may not be enforceable under federal bankruptcy law.
(THE FOLLOWING APPLIES TO TRANSACTIONS GOVERNED BY THE MICHIGAN FRANCHISE INVESTMENT LAW ONLY)
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise:
- (a) A prohibition on the right of a franchisee to join an association of franchisees.
- (b) A requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel which deprives a franchisee of rights and protection provided in this act. This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.
- (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause. Good cause shall include the failure of the franchisee to comply with any lawful provision of
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Michigan law prohibits certain unfair provisions that may appear in franchise documents. If any of the listed provisions are present in any documents related to the Bombs Away franchise, they are considered void and unenforceable against the franchisee.
These specific unenforceable provisions include any prohibitions on a franchisee's right to join a franchisee association, any requirements for a franchisee to agree to a release or waiver that deprives them of rights under the Michigan Franchise Investment Law, and any clauses allowing Bombs Away to terminate the franchise before its term expires without good cause. Good cause is defined as the franchisee's failure to comply with the franchise agreement, provided they are given written notice and a reasonable opportunity (up to 30 days) to correct the failure.
Additionally, Bombs Away cannot refuse to renew a franchise without fairly compensating the franchisee for the market value of their inventory, supplies, equipment, fixtures, and furnishings. The FDD also specifies that Bombs Away cannot require the franchisee to resell items not uniquely identified with the franchisor, or transfer its contractual obligations without ensuring the required services are still provided. If Bombs Away's financial statements show a net worth less than $100,000, a franchisee in Michigan can request an escrow of initial investments until Bombs Away fulfills its obligations to provide real estate, improvements or training.