Regarding the commencement of a Bonchon franchise relationship, can a franchisee waive claims under any applicable state franchise law, including fraud in the inducement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Bonchon's 2025 Franchise Disclosure Document, several states have specific addenda that address the waiver of claims under state franchise law. For franchisees in Illinois, Maryland, California, Hawaii, Indiana, North Dakota and Rhode Island, any statement, questionnaire, or acknowledgment signed in connection with starting the franchise relationship cannot waive claims under applicable state franchise law, including claims of fraud in the inducement. This protection is explicitly stated to supersede any other conflicting terms in any document related to the franchise agreement.
These provisions ensure that franchisees in these states retain their rights under state franchise laws, preventing Bonchon from enforcing waivers that could limit their ability to pursue legal claims. This includes claims related to misrepresentation or fraud during the franchise sales process. The inclusion of these addenda reflects a commitment to comply with state-specific regulations designed to protect franchisees.
For prospective Bonchon franchisees, this means that any document they sign at the beginning of their franchise relationship cannot be used to prevent them from bringing claims related to state franchise law, including fraud. This provides an added layer of protection, ensuring that franchisees are not unknowingly giving up their legal rights. However, franchisees should be aware of the specific laws in their state and consult with legal counsel to fully understand their rights and obligations.
It is important to note that these protections are specific to the states mentioned in the addenda. Franchisees in other states may not have the same level of protection against waivers of state franchise law claims. Therefore, it is crucial for prospective franchisees to carefully review the franchise agreement and any addenda applicable to their state to understand their rights and obligations fully.