Does the C12 Group franchise agreement supersede state franchise law regarding waivers?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
REQUIRED BY STATE OF RHODE ISLAND
FOR PROSPECTIVE PURCHASERS IN THE STATE OF RHODE ISLAND
§19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."
REQUIRED BY STATE OF WASHINGTON
FOR PROSPECTIVE PURCHASERS IN THE STATE OF WASHINGTON
In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.
RCW 19.100.180 may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise. There may also be court decisions which may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise.
REQUIRED BY STATE OF HAWAII
FOR PROSPECTIVE FRANCHISEES IN THE STATE OF HAWAII
These franchises will be/have been filed under the Franchise Investment Law of the State of Hawaii. Filing does not constitute approval, recommendation, or endorsement by the Director of Commerce and Consumer Affairs that the information provided herein is true, complete, and not misleading.
The Franchise Investment Law makes it unlawful to offer or sell any franchise in this state without first providing to the prospective franchisee or Subfranchisor, at least seven days prior to the execution by the prospective franchisee of any binding franchise or other agreement, or at least seven days prior to the payment of any consideration by the franchisee or Subfranchisor, whichever occurs first, a copy of the disclosure document, together with a copy of all proposed agreements relating to the sale of the franchise.
The disclosure document contains a summary of only certain material provisions of the franchise agreement. The contract or agreement should be referred to for a statement of all rights, conditions, restrictions, and obligations, of both the franchisor and the franchisee.
The registered agent in the State of Hawaii authorized to receive service of process is identified in Exhibit C hereto.
REQUIRED BY STATE OF ILLINOIS
Illinois law shall apply to and govern the Franchise Agreement.
In Conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise agreement may provide for arbitration to take place outside of Illinois.
Franchisees' rights upon Termination and Non-Renewal are set forth in Sections 19 and 20 of the Illinois Franchise Disclosure Act.
In conformance with Section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
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 behalf of
the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
REQUIRED BY STATE OF MARYLAND
FOR PROSPECTIVE FRANCHISEES IN THE STATE OF MARYLAND
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.
With regard to Item 17, the following is added:
With regard to Item 17, the following is added:
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- Any claims arising under the Maryland Franchise Registration and Disclosure law must be brought within three (3) years after the grant of the franchise.
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- The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
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- The provision in the Franchise Agreement which provides for termination upon bankruptcy of the franchisee may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101 et seq.).
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- A franchisee may bring a lawsuit in Maryland for claims arising under Maryland Franchise Registration and Disclosure Law.
REQUIRED BY STATE OF MINNESOTA
FOR PROSPECTIVE FRANCHISEES IN THE STATE OF MINNESOTA
Minn. State. §80C.21 and Minn. Rule 2860.4400J prohibit us from requiring litigation to be conducted outside Minnesota. In addition, nothing in the disclosure document or agreement can abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to any procedure, forum, or remedies provided for by the laws or the jurisdiction.
With respect to franchises governed by Minnesota law, the franchisor will comply with Minn. Stat. Sec. 80C.14, Subds. 3, 4, and 5 which require, except in certain specified cases, that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the franchise agreement.
Minn. Rule Part 2860.4400J. prohibits a franchisee from waiving his rights to a jury trial or waiving his rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction, or consenting to liquidated damages, termination penalties or judgment notes. With respect to Franchises governed by Minnesota law, any provisions to the contrary in the disclosure document and/or the franchise agreement are hereby deemed to be deleted.
REQUIRED BY STATE OF NEW YORK
FOR PROSPECTIVE PURCHASERS IN THE STATE OF NEW YORK
- The following information is added to the cover page of the Franchise DisclosureDocument:
EXHIBIT F
CERTAIN STATE DISCLOSURES
REQUIRED BY STATE OF CALIFORNIA
FOR PROSPECTIVE FRANCHISEES IN THE STATE OF CALIFORNIA
Spousal liability: Your spouse will be liable for all financial obligations under the franchise agreement even though your spouse has no ownership interest in the franchise. This guarantee will place both your and your spouse's marital and personal assets, perhaps including your house, at risk if your franchise fails.
The franchise agreement requires binding arbitration. The arbitration will occur in Texas with each party bearing its own respective costs of the arbitration. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE OFFERING CIRCULAR.
Our website has not been reviewed or approved by the California Department of Financial Protection and Innovation. Any complaints concerning the content of this website may be directed to the California Department of Financial Protection and Innovation at www.dfpi.ca.gov.
California Business and Professions Code sections 20000 through 20043 (the Franchise Relations Act) provide rights to the franchisee concerning termination, transfer, or nonrenewal of a franchise. If the franchise agreement contains a provision that is inconsistent with the law, the law will control. In particular, Business and Professions Code section 20010 voids a waiver of your rights under the Franchise Relations Act.
Section 31125 of the California Corporation Code requires us to provide you with a disclosure document before asking you to agree to a material modification of an existing franchise.
Neither the franchisor nor any person or franchise broker in Item 2 of the Franchise Disclosure Document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in such association or exchange.
With respect to the Late Fee described in Item 6, this Item is amended to disclose that the maximum rate of interest permitted under California law is 10%.
A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
Source: Item 23 — RECEIPTS (FDD pages 46–137)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, the franchise agreement's ability to supersede state franchise laws regarding waivers is limited and subject to state-specific regulations. Several states have specific provisions to protect franchisees from unknowingly waiving their rights under state franchise laws. These provisions generally state that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by the franchisor. This protection supersedes any conflicting terms in any document related to the franchise agreement.
For instance, the FDD includes specific clauses for prospective franchisees in California, stating that if the franchise agreement contains a provision inconsistent with the California Franchise Relations Act, the law will control, and waivers of rights under this act are void. Similarly, Illinois law governs the franchise agreement, and any provision designating jurisdiction and venue outside of Illinois is void, although arbitration outside of Illinois may be allowed. Furthermore, any attempt to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law is void.
Other states like Maryland, Minnesota, New York, Rhode Island, and Washington also have stipulations preventing the franchise agreement from overriding franchisee protections under their respective state laws. Minnesota law prohibits C12 Group from requiring litigation to be conducted outside of Minnesota and ensures that no part of the agreement reduces any rights provided under Minnesota Statutes, Chapter 80C. Washington's Franchise Investment Protection Act prevails in case of conflict of laws, and releases or waivers of rights may not include rights under this Act unless executed under specific conditions with independent counsel. Rhode Island states that any provision restricting jurisdiction or venue to a forum outside of Rhode Island or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under their Act.
These state-specific disclosures indicate that while the C12 Group franchise agreement is a legally binding document, its terms are subordinate to the franchise laws of certain states, particularly concerning waivers of rights and legal recourse. Prospective franchisees should be aware of these state-specific protections and consult with legal counsel to understand their rights fully.