Which states trigger the 'No Waiver or Disclaimer of Reliance' provision in the Chesters franchise agreement?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
The following provision applies only to franchisees and franchises that are subject to the state franchise registration/disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin:
No statement, questionnaire, or acknowledgement signed or agreed to by you 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 us, any franchise seller, or any other person acting on our behalf. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the 'No Waiver or Disclaimer of Reliance' provision applies to franchisees in specific states with franchise registration/disclosure laws. These states are California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin. This provision ensures that no statement, questionnaire, or acknowledgment signed by a franchisee at the start of the franchise relationship can waive claims under state franchise law, including fraud, or disclaim reliance on statements made by Chesters or its representatives. This clause takes precedence over any conflicting terms in any document related to the franchise agreement.
For a prospective Chesters franchisee, this means that if their franchise is located in one of the listed states, they retain their rights under state franchise laws, and any attempt to waive those rights or disclaim reliance on statements made by Chesters is invalid. This protection is particularly important in states with strong franchise laws, as it prevents Chesters from using waivers or disclaimers to avoid liability for misrepresentations or violations of franchise law. The provision aims to protect franchisees from being pressured into giving up their legal rights at the outset of the franchise relationship.
This type of provision is not uncommon in franchise agreements, especially in states with robust franchise regulations. It reflects a growing trend towards protecting franchisees and ensuring a fair balance of power between franchisors and franchisees. Franchisees should be aware of this provision and understand their rights under state law, as it can be a valuable safeguard against potential misconduct by the franchisor. It is advisable for prospective franchisees to consult with an attorney to fully understand the implications of this provision and how it applies to their specific situation.