Regarding the Checkers franchise, can a disclaimer signed by a franchisee waive a claim of fraud in the inducement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ALIFORNIA, 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.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkers Franchise Disclosure Document, in certain states, a disclaimer signed by a franchisee cannot waive a claim of fraud in the inducement. Specifically, for franchisees subject to franchise disclosure laws in California, Indiana, Michigan, Rhode Island, or Wisconsin, no statement, questionnaire, or acknowledgment can waive claims under 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 other documents.
In Illinois and New York, similar protections exist. No disclaimer signed by a Checkers franchisee can waive a claim of fraud in the inducement, whether based on common law or statute. Franchisees also cannot disclaim reliance on statements or information from Checkers or its brokers that materially induced their investment. This protection supersedes any inconsistent terms in franchise documents.
These stipulations ensure that Checkers franchisees in these states retain their legal rights and recourse against potential misrepresentations or fraudulent behavior by the franchisor during the franchise sales process. This is a significant protection for franchisees, preventing them from unknowingly relinquishing their right to sue for fraud based on misleading information provided by Checkers.