For Carls franchisees in California, what is the specific effect of the franchisee signing a questionnaire?
Carls Franchise · 2024 FDDAnswer from 2024 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.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to the 2024 FDD, for Carls franchisees in California, any statement, questionnaire, or acknowledgment signed in connection with starting the franchise relationship cannot waive claims under California franchise law, including claims of fraud. It also cannot disclaim reliance on statements made by Carls, its sellers, or anyone acting on Carls' behalf.
This means that even if a franchisee signs a document that seems to waive their rights or acknowledge certain statements, those waivers or acknowledgments are not legally binding if they conflict with California franchise law. This protects franchisees from inadvertently giving up their legal rights during the initial stages of the franchise agreement.
This provision is particularly important because it prevents Carls from using standard form agreements to shield itself from liability for misrepresentations or violations of California franchise law. Franchisees retain the right to pursue legal action if they believe they were misled or defrauded, regardless of any documents they may have signed at the beginning of the franchise relationship. This protection is specific to California and other states with similar addenda, as franchise laws vary by state.