Does the Chocolate Fish Coffee disclosure document include State Addenda to Agreements?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
the last two pages of this disclosure document.
EXHIBIT A
STATE ADDENDA TO DISCLOSURE DOCUMENT
CALIFORNIA ADDENDUM TO DISCLOSURE DOCUMENT
The registration of this franchise does not constitute approval, recommendation, or endorsement by the commissioner by the California Department of Financial Protection and Innovation.
California limited liability companies Code, Section 31125 requires the franchisor to give the franchisee a disclosure document, approved by the Department of Financial Protection and Innovation, 14 days prior to the execution of an agreement or the solicitation of a proposed material modification of an existing agreement.
The California Franchise Investment Law requires that a copy of all proposed agreements relating to the sale of the franchise be delivered together with the offering circular 14 days prior to execution of agreement.
Our website, chocolatefishcoffee.com, has not been reviewed or approved by the California Department of Financial Protection and Innovation. Any complaints concerning the content of this website may be directed to the California Department of Financial Protection and Innovation at www.dfpi.ca.gov.
California's Franchise Investment Law (Corporations Code sections 31512 and 31512.1) states that any provision of a franchise agreement or related document requiring the franchisee to waive specific provisions of the law is contrary to public policy and is void and unenforceable. The law also prohibits a franchisor from disclaiming or denying (i) representations it, its employees, or its agents make to you, (ii) your ability to rely on any representations it makes to you, or (iii) any violations of the law.
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee 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 any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Neither the franchisor, nor any person or franchise broker listed in Item 2 of the disclosure document is subject to any currently effective order of any national securities association or national securities exchange as defined int eh Securities Exchange Act of 1934 (15 U.S.C.A. §78A et seq.), suspending or expelling these persons from membership in such association or exchange.
All the owners of the franchise will be required to execute personal guarantees. This requirement places the marital assets of the spouses domiciled in community property states – AZ, CA, ID, LA, NV, NM, TX, WA and WI – at risk if your franchise fails.
Both the Governing Law and Choice of Law for Franchisees operating outlets located in California, will be the California Franchise Investment law and the California Franchise Relations Act regardless of the choice of law or dispute resolution venue stated elsewhere. Any language in the franchise agreement or amendment to or any agreement to the contrary is superseded by this condition.
The franchise agreement contains a covenant not to compete which extends beyond the termination of the franchise. A contract that restrains a former franchisee from engaging in a lawful trade or business is to that extent void under California Business and Professions Code Section 16600.
- The following paragraph is added to the end of Item 3 of the Disclosure Document:
Neither franchisor nor any person or franchise broker in Item 2 of this disclosure document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in that association or exchange.
- The following paragraph is added to the end of Item 6 of the Disclosure Document:
With respect to the Late Fee described in Item 6, this Item is amended to disclose that the maximum rate of interest permitted under California law is 10%.
- The following paragraphs are added at the end of Item 17 of the Disclosure Document:
The Franchise Agreement requires franchisee to sign a general release of claims upon renewal or transfer of the Franchise Agreement. California Corporations Code Section 31512 provides that any condition, stipulation or provision purporting to bind any person acquiring a franchise to waive compliance with any provision of that law or any rule or order thereunder is void.
California Business and Professions Code Sections 20000 through 20043 provide rights to the franchisee concerning termination, transfer, or non-renewal of a franchise.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the document includes state-specific addenda. Exhibit A contains the State Addenda to the Disclosure Document, including a California Addendum. The disclosure also contains a Washington Addendum to Disclosure Document and Rider to Franchise and Multi-Unit Development Agreement.
These addenda address specific legal requirements and potential conflicts with state laws. For example, the California addendum clarifies that the state's Department of Financial Protection and Innovation does not endorse the franchise and outlines specific requirements of California's Franchise Investment Law. The Washington addendum notes that state statutes may supersede the franchise agreement, particularly regarding termination and renewal.
Additionally, there is a Rhode Island Rider to Franchise and Multi-Unit Development Agreement. This rider specifies that any agreement provision restricting jurisdiction or venue to a forum outside of Rhode Island or requiring the application of other states' laws is void concerning claims enforceable under the Rhode Island Franchise Investment Act. These addenda and riders modify the standard franchise agreement to comply with state-specific franchise laws, ensuring that Chocolate Fish Coffee franchises operate within the legal framework of each state.