Under the Cicis franchise agreement, what is the exception to the franchisee's indemnification obligations?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Entire Agreement. This Agreement and the attachments hereto constitute the entire, full, and complete agreement between us and you concerning the subject matter hereof and will supersede all prior related agreements between us and you; provided, however, that nothing in this or any related agreement is intended to disclaim the representations we made in the franchise disclosure document that we furnished to you. Except for those permitted to be made unilaterally by us hereunder, no amendment, change, or variance from this Agreement will be binding on either party unless mutually agreed to by the parties and executed by their authorized officers or agents in writing.
- C. No Waiver. The following provision applies if you or the franchise granted hereby are subject to the franchise registration or disclosure laws of Illinois, Indiana, Maryland or Virginia: 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. No delay, waiver, omission, or forbearance to exercise any right, option, duty, or power arising out of any breach or default by a party will constitute a waiver of the right to enforce any such right, option, duty, or power, or as to a subsequent breach or default. Acceptance by us of any payments after their due date will not be deemed a waiver of any preceding breach of your or your related parties' obligations however those obligations arise.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
Based on the 2025 Cicis Franchise Disclosure Document, the franchise agreement includes a provision that if the franchisee is subject to franchise registration or disclosure laws of Illinois, Indiana, Maryland, or Virginia, no statement, questionnaire, or acknowledgment signed by the franchisee can waive claims under applicable state franchise law, including fraud in the inducement. Additionally, franchisees cannot disclaim reliance on statements made by the franchisor, franchise seller, or anyone acting on behalf of the franchisor. This provision takes precedence over any other conflicting term in any document related to the franchise agreement.
This means that even if a franchisee signs a document that appears to waive certain rights or claims, those waivers may not be enforceable under the franchise laws of the specified states. This protects franchisees from inadvertently giving up legal rights during the initial stages of the franchise relationship. The FDD emphasizes that this protection extends to claims of fraud in the inducement, which occur when a franchisee believes they were misled into entering the agreement based on false representations by the franchisor.
For a prospective Cicis franchisee, this clause offers a degree of security, particularly if they are located in or subject to the laws of Illinois, Indiana, Maryland, or Virginia. It ensures that they retain the ability to pursue legal remedies for fraud or misrepresentation, regardless of any waivers or disclaimers they may have signed. This provision encourages transparency and honesty from the franchisor during the franchise sales process, as any misstatements could lead to legal repercussions despite contractual waivers. Franchisees should consult with legal counsel to fully understand their rights and protections under these state franchise laws.