Can a Checkers franchisee waive claims of fraud in the inducement in Illinois?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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- In conformance with section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act or any other law of Illinois is void.
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- No disclaimer, questionnaire, clause, or statement signed by a franchisee in connection with the commencement of the franchise relationship shall be construed or interpreted as waiving any claim of fraud in the inducement, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a
material inducement to a franchisee's investment. This provision supersedes any other or inconsistent term of any document executed in connection with the franchise.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, franchisees in Illinois cannot waive claims of fraud in the inducement. The Illinois Rider to the Franchise Agreement explicitly states that no statement or clause can be interpreted as a waiver of fraud claims, whether those claims are based in common law or statute. This protection extends to reliance on information provided by Checkers, its brokers, or anyone acting on Checkers' behalf if that information materially induced the franchisee's investment. This provision overrides any conflicting terms in any document related to the franchise agreement.
This means that if a Checkers franchisee in Illinois believes they were fraudulently induced into investing in the franchise based on misrepresentations or omissions by Checkers, they retain the right to pursue legal action. The franchise agreement cannot contain any clauses that force the franchisee to relinquish this right. This protection is in place to ensure that franchisees are not unfairly disadvantaged by deceptive practices during the franchise sales process.
This protection is specific to Illinois due to the Illinois Franchise Disclosure Act. Other states may have different regulations regarding waivers and disclaimers in franchise agreements. Therefore, it is crucial for prospective franchisees to understand the specific laws in their state and consult with an attorney to fully understand their rights and obligations before signing a franchise agreement.