Is Bonchon prohibited from modifying a franchise agreement in California in exchange for assistance related to a declared state or federal emergency?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- California's Franchise Investment Law (Corporations Code sections 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.
-
- No statement, questionnaire, or acknowledgement 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.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to the 2025 Bonchon Franchise Disclosure Document, California's Franchise Investment Law has specific protections for franchisees. Specifically, it states that any provision in a franchise agreement that requires a franchisee to waive specific provisions of the law is against public policy and therefore void and unenforceable. This means Bonchon cannot enforce any clause that forces a franchisee to surrender their legal rights under the California Franchise Investment Law.
Furthermore, the law explicitly prohibits Bonchon from disclaiming or denying representations made to a franchisee, preventing franchisees from relying on these representations, or disclaiming any violations of the law. This ensures that franchisees can hold Bonchon accountable for their statements and actions during the franchise relationship.
Additionally, any statement, questionnaire, or acknowledgment signed by a Bonchon franchisee at the start of the franchise relationship cannot waive claims under state franchise law, including claims of fraud in the inducement. It also prevents Bonchon from disclaiming reliance on statements made by the franchisor or its representatives. This provision overrides any conflicting terms in any document related to the franchise agreement, strengthening franchisee protections under California law.