What happens if a provision in the Brueggers Bagels franchise agreement disclaims reliance by a franchisee on the franchise disclosure document in California?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 31125 of the California Corporations Code requires us to give you a disclosure document, in a form containing the information that the commissioner may by rule or order require, before a solicitation of a proposed material modification of an existing franchise.
Any provision of a franchise agreement, franchise disclosure document, acknowledgement, questionnaire, or other writing, including any exhibit thereto, disclaiming or denying any of the following shall be deemed contrary to public policy and shall be void and unenforceable:
- (a) Representations made by the franchisor or its personnel or agents to a prospective franchisee.
- (b) Reliance by a franchisee on any representations made by the franchisor or its personnel or agents.
- (c) Reliance by a franchisee on the franchise disclosure document, including any exhibit thereto.
- (d) Violations of any provision of this division.
CALIFORNIA ADDENDUM TO THE FRANCHISE AGREEMENT, LICENSE AGREEMENT AND DEVELOPMENT AGREEMENT
FRANCHISOR and FRANCHISEE have signed a Franchise Agreement or License Agreement or Area Development Agreement for a franchise to be located in California. This Addendum reflects provisions of California law.
Source: Item 23 — RECEIPTS (FDD pages 61–335)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, California law protects franchisees from certain disclaimers within the franchise agreement. Specifically, any provision that disclaims or denies a franchisee's reliance on the Franchise Disclosure Document (FDD) is considered against public policy and is therefore void and unenforceable. This means that Brueggers Bagels cannot include clauses that prevent a franchisee from claiming they relied on the information provided in the FDD when making their investment decision. This protection is outlined in Section 31125 of the California Corporations Code.
This safeguard ensures that prospective Brueggers Bagels franchisees in California can hold the franchisor accountable for the representations made in the FDD. It prevents Brueggers Bagels from using contractual language to shield themselves from liability if the information in the FDD is misleading or inaccurate. The California addendum to the franchise agreement explicitly states that no disclaimer signed by a franchisee can waive claims of fraud or disclaim reliance on statements made by the franchisor.
In practical terms, this means that if a Brueggers Bagels franchisee in California believes they were misled by the FDD, they can pursue legal action against the franchisor, even if the franchise agreement contains language that attempts to limit such claims. This protection is a significant benefit for franchisees, as it reinforces the importance of accurate and truthful disclosures in the franchising process. It also aligns with the broader goal of the California Franchise Investment Law, which aims to protect franchisees from unfair or deceptive practices.