What laws must a Casiola franchise transfer comply with?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
In recognition of the requirements of the New York General Business Law, Article 33, Sections 680 through 695, and of the regulations promulgated thereunder (N.Y. Comp. Code R. & Regs., tit. 13, §§ 200.1 through 201.16), the parties to the attached Casiola Franchise LLC Franchise Agreement (the "Franchise Agreement"):
Under Article 14.C. of the Franchise Agreement, under the heading "Conditions for Approval of Transfer," the subarticle 14.C.(6) is supplemented with the addition of the following language:
- ; provided, however, that all rights and causes of action arising in favor of Franchisee from the provisions of New York General Business Law Sections 680-695 and the regulations issued thereunder, shall remain in force; it being the intent of this provision that the non-waiver provisions of N.Y.
Gen.
Bus.
Law Sections 687.4 and 687.5 be satisfied.
HAWAII FRANCHISE AGREEMENT AMENDMENT
In recognition of the requirements of the Hawaii Franchise Investment Law, the undersigned agree to the following modifications to Casiola Franchise LLC Franchise Agreement (the "Franchise Agreement"), as follows:
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- Sub-Article 14.C.(6). Sub-article 14.C.(6), under the Article section titled "Conditions for Approval of Transfer," is supplemented by the addition of the following language:
- ; provided, however, that all rights enjoyed by Franchisee and any causes of action arising in Franchisee's favor from the provisions of the Hawaii Franchise Investment Law, shall remain in force; it being the intent of this provision that the non-waiver provisions of the Hawaii Franchise Investment Law be satisfied; and
The Hawaii Franchise Investment Law provides rights to the franchisee concerning non-renewal, termination and transfer of the Franchise Agreement. If this Sub-article contains a provision that is inconsistent with the Hawaii Franchise Investment Law, the Hawaii Franchise Investment Law will control.
MARYLAND FRANCHISE AGREEMENT AMENDMENT
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, the parties to the attached Casiola Franchise LLC Franchise Agreement (the "Franchise Agreement"), as follows:
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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.
D. Item 17 "Renewal, Termination, Transfer and Dispute Resolution," Item 17 is supplemented by the addition of the following: Item 17 shall not provide for a prospective general release of claims against us that may be subject to the Minnesota Franchise Law. Minn. Rule 2860.4400D prohibits a franchisor from requiring a franchisee to assent to a general release.
G. The Franchise Agreement requires application of the laws of the State of Florida. This provision may not be enforceable under California law.
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- Section 31125 of the California Corporations Code requires us to give you a disclosure document, in a form containing the information that the commissioner may by rule or order require, before a solicitation of a proposed material modification of an existing franchise.
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- You must sign a general release of claims if you renew or transfer your franchise. California Corporations Code Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31516).
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- Business and Professions Code Section 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 through 20043).
INFORMATION COMPARING FRANCHISORS IS AVAILABLE. CALL THE STATE ADMINISTRATORS LISTED IN EXHIBIT A OR YOUR PUBLIC LIBRARY FOR SERVICES OR INFORMATION. REGISTRATION OF THIS FRANCHISE BY NEW YORK STATE DOES NOT MEAN THAT NEW YORK STATE RECOMMENDS IT OR HAS VERIFIED THE INFORMATION IN THIS FRANCHISE DISCLOSURE DOCUMENT. IF YOU LEARN ANYTHING IN THIS FRANCHISE DISCLOSURE DOCUMENT IS UNTRUE, CONTACT THE FEDERAL TRADE COMMISSION AND THE APPROPRIATE STATE OR PROVINCIAL AUTHORITY. THE FRANCHISOR MAY, IF IT CHOOSES, NEGOTIATE WITH YOU ABOUT ITEMS COVERED IN THE FRANCHISE DISCLOSURE DOCUMENT. HOWEVER, THE FRANCHISOR CAN NOT USE THE NEGOTIATING PROCESS TO PREVAIL UPON A PROSPECTIVE FRANCHISEE TO ACCEPT TERMS THAT ARE LESS FAVORABLE THAN THOSE SET FORTH IN THIS FRANCHISE DISCLOSURE DOCUMENT.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, franchise transfers are subject to specific state laws, particularly in New York, Hawaii, Maryland, and California. In New York, the franchise transfer must comply with the New York General Business Law, Article 33, Sections 680 through 695, and the regulations promulgated thereunder. These laws ensure that franchisees retain all rights and causes of action arising from these sections, specifically addressing non-waiver provisions. Similarly, in Hawaii, transfers must adhere to the Hawaii Franchise Investment Law, which protects the franchisee's rights concerning non-renewal, termination, and transfer, ensuring that the state law takes precedence if any provision is inconsistent. Maryland requires compliance with the Maryland Franchise Registration and Disclosure Law, ensuring that franchisees retain the right to file lawsuits in Maryland for violations of this law, and that general releases do not apply to liabilities under this law. California Corporations Code Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31516) and Business and Professions Code Section 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 through 20043). These state-specific stipulations highlight the importance of understanding the legal landscape governing franchise operations in each region.
These state laws often include non-waiver provisions, meaning franchisees cannot be forced to give up their rights under these laws as a condition of the transfer. This is particularly relevant in states like New York, Hawaii, and Maryland, where specific amendments to the franchise agreement ensure these rights are preserved. For instance, the New York amendment explicitly states that all rights and causes of action arising from the New York General Business Law remain in force, satisfying the non-waiver provisions. Similarly, the Hawaii amendment ensures that rights under the Hawaii Franchise Investment Law are protected, giving the franchisee additional security during the transfer process. The Maryland amendment ensures that the general release required as a condition of transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
For a prospective Casiola franchisee, this means that the transfer process is not just a matter of fulfilling the franchisor's requirements but also adhering to state-specific legal protections. It is crucial to consult with legal counsel to ensure full compliance with these laws and to understand the extent of the rights and obligations involved. This is especially important if the franchise is located in a state with strong franchise protection laws like California, New York, Hawaii, or Maryland. Understanding these legal nuances can help avoid potential disputes and ensure a smooth transfer process, safeguarding the franchisee's investment and operational rights. Furthermore, the franchisee should be aware of the potential for negotiation, as indicated in the New York FDD Amendment, which suggests that while negotiation is possible, the franchisor cannot impose terms less favorable than those in the FDD.