What effect do statements, questionnaires, or acknowledgments signed by a Brain Balance franchisee have on waiving claims under state franchise law?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
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- No statement, questionnaire, or acknowledgment 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 72–292)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, several states have specific addenda that address the enforceability of waivers and releases signed by franchisees. In general, these addenda clarify that no statement, questionnaire, or acknowledgment signed by a franchisee at the start of the franchise relationship can waive claims under applicable state franchise laws. This includes claims related to fraud in the inducement or disclaiming reliance on statements made by Brain Balance or its representatives. This provision is designed to supersede any conflicting terms in other franchise documents. These protections are specified in addenda for California, Minnesota, Maryland, Illinois, Hawaii and Washington.
For franchisees in California, the California Corporations Code voids waivers of rights under the Franchise Investment Law and the Franchise Relations Act. Similarly, Maryland's franchise regulations consider it an unfair practice to require a franchisee to waive their right to sue in Maryland for violations of Maryland Franchise Law. Illinois law stipulates that any provision requiring a franchisee to waive compliance with the Illinois Franchise Disclosure Act or other Illinois laws is void. Washington's Franchise Investment Protection Act also takes precedence over conflicting franchise agreement provisions, especially concerning termination and renewal rights.
These stipulations provide significant protection to Brain Balance franchisees by ensuring that their rights under state franchise laws cannot be unintentionally waived through standard documents signed during the franchise commencement. However, in Washington, a franchisee can execute a release or waiver if it is part of a negotiated settlement, agreed to after the franchise agreement is in effect, and both parties are represented by independent counsel. Prospective franchisees should consult with an attorney to fully understand their rights and the implications of any waivers or releases they may be asked to sign.