For Carls franchisees in California, what is the specific effect of the franchisee signing a statement?
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 Carls's 2024 Franchise Disclosure Document, any statement, questionnaire, or acknowledgment signed by a franchisee in California related to the start of the franchise relationship cannot waive claims under California franchise law. This includes claims related to fraud. Additionally, these documents cannot disclaim reliance on statements made by Carls, franchise sellers, or anyone acting on behalf of Carls.
This provision is designed to protect franchisees in California from inadvertently giving up their legal rights through standard paperwork at the beginning of the franchise relationship. It ensures that franchisees can still pursue legal claims, even if they have signed documents that might suggest otherwise. This protection extends to claims of fraud in the inducement, meaning if Carls made misleading statements to convince someone to buy the franchise, the franchisee's ability to sue over those statements is preserved.
This clause overrides any other conflicting terms in any document signed in connection with the franchise agreement. This means that even if another part of the franchise agreement seems to limit the franchisee's rights, this specific provision will take precedence, reinforcing the franchisee's protections under California law.