Can Buildingstars' representations made in the franchise disclosure document be disclaimed by anything in the franchise agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- K.
No Warranty.
FRANCHISEE acknowledges that, except as otherwise specifically stated herein, BUILDINGSTARS has the absolute right to exercise its own judgment on various matters about this Agreement and the Manual, and has the absolute right to approve, disapprove, give its consent and refuse to consent to FRANCHISEE'S requests in its sole and absolute discretion.
FRANCHISEE agrees that BUILDINGSTARS' action, refusal to act, approval, disapproval, consent, or refusal of consent is not, and shall not be deemed, a representation, warranty, certification or guarantee by BUILDINGSTARS about that which is acted upon or refused consent, or about any appropriateness, legality, profitability, or success related thereto.
No BUILDINGSTARS action, refusal to act, approval, disapproval, consent or refusal to consent is, or shall be deemed, a guarantee, warranty, or representation that the Business complies with, or meets any local, municipal, state, federal, or other laws or regulations relating to the offer of services or otherwise.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the franchise agreement includes a "No Warranty" clause. This clause stipulates that Buildingstars has the right to exercise its own judgment on matters related to the agreement and the manual, and to approve or disapprove franchisee requests at its discretion. Buildingstars's actions, approvals, or refusals are not considered representations, warranties, certifications, or guarantees regarding the appropriateness, legality, profitability, or success of any related matter.
Furthermore, the "No Warranty" clause specifies that no action, refusal to act, approval, disapproval, consent, or refusal of consent by Buildingstars constitutes a guarantee, warranty, or representation that the business complies with any local, municipal, state, federal, or other laws or regulations related to the services offered. This means that franchisees cannot hold Buildingstars liable for any perceived guarantees or assurances based on the franchisor's actions or statements, except as explicitly stated in the franchise agreement.
This type of clause is relatively common in franchise agreements. It aims to protect the franchisor from liability based on subjective judgments or general statements made during the franchise sales process. However, prospective franchisees should carefully review the entire franchise agreement and disclosure document to understand the full scope of their rights and obligations, and seek legal counsel to clarify any ambiguities or concerns.