Can a Casiola franchisee disclaim reliance on statements made by the franchisor by signing a statement or acknowledgement?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
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 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 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, a franchisee cannot disclaim reliance on statements made by the franchisor, franchise seller, or anyone acting on their behalf by signing a statement, questionnaire, or acknowledgement related to the commencement of the franchise relationship. This protection extends to claims under applicable state franchise laws, including fraud in the inducement. This provision overrides any other conflicting terms in any document associated with the franchise agreement. This protection is included in state-specific amendments to the franchise agreement for California, Illinois, Minnesota, New York, Washington and Wisconsin.
This means that Casiola franchisees in these states retain the right to pursue legal action based on misrepresentations or fraudulent statements made by Casiola during the franchise sales process, regardless of any disclaimers they may have signed. This is a significant protection for franchisees, as it prevents Casiola from using standardized forms to shield themselves from liability for misleading information.
It is important to note that the effectiveness of these amendments is contingent upon meeting the jurisdictional requirements of the relevant state's franchise law independently, without relying on the amendment itself. This implies that the franchisee must be domiciled in the state or the outlet must be opening in the state for the protection to apply. Prospective franchisees should consult with legal counsel to fully understand their rights and protections under the franchise agreement and applicable state laws.