Can a disclaimer signed by a Checkers franchisee waive a claim of fraud in the inducement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
N CALIFORNIA, INDIANA, MICHIGAN, RHODE ISLAND, AND WISCONSIN**
This Rider DRIVE-IN RESTAURANTS, INC., a Delaware Street, Suite 710, Tampa, Florida , ("Franchisee"). (the "Rider") is made and entered into by and between CHECKERS corporation located at 4300 West Cypress 33607 ("Franchisor"), and whose principal business address is 1. Background. Franchisor and Franchisee are parties to that certain Franchise Agreement that has been signed at the same time as the signing of this Rider (the "Franchise Agreement"). This Rider is part of the Franchise Agreement. 2. The following No Waiver of Disclaimer of Reliance in Certain States. provision applies only to franchisees and franchises that are subject to the state franchise disclosure laws in California, Indiana, Michigan, Rhode Island, or Wisconsin: No statement, questionnaire or acknowledgment signed or agreed to by a franchisee the 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 inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or any other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise. IN WITNESS WHEREOF, the parties have executed and delivered this Rider effective on the Effective Date stated in the Franchise Agreement. CHECKERS DRIVE-IN RESTAURANTS, INC. A Delaware Corporation Checkers/Rally's April 2025
ITEM 23 RECEIPTS
The last 2 pages of this Franchise Disclosure Document are identical pages acknowledging receipt of this entire document (including the exhibits). Please sign and return to us one copy and please keep the other copy along with this Franchise Disclosure Document.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, disclaimers signed by franchisees cannot waive claims of fraud in the inducement under certain circumstances. Specifically, for franchisees subject to state franchise disclosure laws in California, Indiana, Michigan, Rhode Island, or Wisconsin, no statement, questionnaire, or acknowledgment can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Checkers or its representatives. This provision overrides any conflicting terms in franchise documents.
Additionally, for franchisees in Illinois and New York, no disclaimer, questionnaire, clause, or statement signed in connection with the commencement of the franchise relationship can be interpreted as waiving any claim of fraud in the inducement, whether based on common law or statute. Similarly, these documents cannot disclaim reliance on statements or information provided by Checkers, brokers, or other representatives that materially induced the franchisee's investment. This provision also supersedes any other inconsistent terms in any document related to the franchise agreement.
These stipulations ensure that Checkers franchisees in these states retain their legal rights to pursue claims of fraud, regardless of any disclaimers they may have signed. This protection is particularly important as it prevents franchisees from unknowingly relinquishing their rights based on potentially misleading information provided during the franchise sales process. Prospective franchisees should carefully review these provisions and consult with legal counsel to fully understand their rights and protections under the franchise agreement and applicable state laws.