In Virginia, can a Boulder Designs franchisee waive claims under state franchise law?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
- Item 5 and Item 7 are supplemented by the following:
The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires us to defer payment of the initial franchise fee and other initial payments owed by franchisees to the franchisor until the franchisor has completed its pre-opening obligations under the franchise agreement.
- Item 17 is supplemented by the following language:
"Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the Franchise Agreement does not constitute "reasonable cause", as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable."
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–44)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the Virginia State Corporation Commission requires that the payment of initial franchise fees and other initial payments be deferred until Boulder Designs has completed its pre-opening obligations under the franchise agreement. Additionally, the FDD states that under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for Boulder Designs to cancel a franchise without reasonable cause. If any ground for default or termination stated in the Franchise Agreement does not constitute "reasonable cause", as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
However, the FDD does not explicitly state whether a Boulder Designs franchisee in Virginia can waive claims under state franchise law. The document provides information on the deferral of initial fees and the requirement of "reasonable cause" for franchise cancellation, but it does not address the issue of franchisees waiving their rights under Virginia franchise law.
Therefore, a prospective Boulder Designs franchisee in Virginia should seek clarification from the franchisor regarding the enforceability of waivers of claims under the Virginia Retail Franchising Act. It would be prudent to consult with a legal professional experienced in franchise law to fully understand their rights and obligations under the franchise agreement and applicable state laws.