Does the California Addendum to the Bonchon Area Development Agreement allow franchisees or area developers to waive claims under state franchise law?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything to the contrary set forth in the Area Development Agreement, the following provisions will supersede and apply to all area development agreements offered and sold in the State of California:
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- No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee (or area 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 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the California Addendum to the Area Development Agreement explicitly prohibits franchisees or area developers from waiving claims under state franchise law. Specifically, any statement, questionnaire, or acknowledgement signed in connection with starting the franchise relationship cannot waive claims under any applicable state franchise law, including claims of fraud in the inducement. This also means franchisees and area developers cannot disclaim reliance on statements made by Bonchon or anyone acting on its behalf.
This provision is designed to protect franchisees and area developers in California by ensuring they retain their rights under California franchise law. It prevents Bonchon from using standard contract language to inadvertently or intentionally limit the legal protections afforded to franchisees under California law. This protection extends to claims of fraud, ensuring that franchisees can pursue legal remedies if they believe they were misled during the franchise sales process.
This type of addendum is common in franchise agreements for states with strong franchise protection laws like California. It reflects an effort by Bonchon to comply with these state-specific regulations and ensure that its agreements are enforceable within the state. Prospective Bonchon franchisees in California should take comfort in knowing that their rights under state franchise law are protected and cannot be waived through standard contractual clauses.