In which states does the 'No Waiver or Disclaimer of Reliance' provision apply to Carvel franchisees?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
The following provision applies only to franchisees and Franchised Businesses that are subject to the state franchise disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin:
No statement, questionnaire, or acknowledgement signed or agreed to by you 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 us, any franchise seller, or any other person acting on behalf of us. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the 'No Waiver or Disclaimer of Reliance' provision applies specifically to franchisees and franchised businesses that are subject to state franchise disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin. This provision ensures that no statement, questionnaire, or acknowledgement signed by the franchisee can waive claims under applicable state franchise law, including claims related to fraud in the inducement. It also prevents franchisees from disclaiming reliance on statements made by Carvel or its representatives.
This provision is significant because it protects franchisees in these states from inadvertently giving up their legal rights through standard documents signed during the franchise commencement. It reinforces that franchisees can rely on the information provided by Carvel and are not waiving their right to pursue legal claims if that information proves to be false or misleading. This protection is particularly important in states with robust franchise laws aimed at safeguarding franchisee interests.
The FDD also includes addenda for several of these states, such as North Dakota, Maryland, Rhode Island, and Virginia, which further modify certain provisions of the franchise agreement to comply with state-specific franchise laws. These addenda highlight the importance of franchisees understanding the specific legal protections available to them in their state of operation. The Franchisee Disclosure Acknowledgement explicitly states that it should not be completed by franchisees if the offer or sale of the franchise is subject to the franchise disclosure laws in the aforementioned states, reinforcing the non-waiver provision.
Prospective Carvel franchisees in these states should carefully review the state-specific addenda and understand their rights under the applicable franchise laws. This provision offers an additional layer of protection, ensuring that franchisees are not pressured into waiving their legal rights or disclaiming reliance on Carvel's representations. This can provide greater confidence and security when entering into the franchise agreement.