For Cilantro Taco Grill franchisees, can any statement, questionnaire, or acknowledgment disclaim reliance on any statement made by the franchisor, franchise seller, or other person acting on behalf of the franchisor?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
The undersigned does hereby acknowledge receipt of this addendum.
CTG Franchise LLC Ву: Ву: Name: Cuahutémoc Morfin Title: Owner PRINCIPAL:
EXHIBIT H FRANCHISEE ACKNOWLEDGEMENT STATEMENT
As you know, CTG Franchise LLC (the "Franchisor") and you are preparing to enter into a franchise agreement (the "Franchise Agreement") for the establishment and operation of a Cilantro Taco Grill franchised business (the "Franchised Business"). The purpose of this Questionnaire is to determine whether any statements or promises were made to you by employees or authorized representatives of the Franchisor, or by employees or authorized representatives of Fransmart, LLC ("Fransmart") that have not been authorized, or that were not disclosed in the Disclosure Document or that may be untrue, inaccurate or misleading. The Franchisor, through the use of this document, desires to ascertain (a) that the undersigned, individually and as a representative of any legal entity established to acquire the franchise rights, fully understands and comprehends that the purchase of a franchise is a business decision, complete with its associated risks, and (b) that you are not relying upon any oral statement, representations, promises or assurances during the negotiations for the purchase of the franchise which have not been authorized by Franchisor.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, any statement, questionnaire, or acknowledgment signed by a franchisee cannot disclaim reliance on statements made by the franchisor, franchise seller, or anyone acting on the franchisor's behalf. This protection extends to claims under applicable state franchise laws, including fraud in the inducement.
This provision is designed to protect franchisees from unknowingly waiving their rights based on statements made during the franchise sales process. It ensures that franchisees can still pursue legal claims if they believe they were misled, even if they signed a document that appears to disclaim reliance on those statements. This clause supersedes any other conflicting terms in any document executed in connection with the franchise agreement.
Cilantro Taco Grill also uses a Franchisee Acknowledgement Statement to determine if unauthorized, untrue, inaccurate, or misleading statements or promises were made. The franchisor wants to ensure the franchisee understands that purchasing a franchise is a business decision with associated risks and that the franchisee is not relying on unauthorized oral statements. This acknowledgement aims to confirm the franchisee's understanding of the business risks and to identify any potential misrepresentations made during the negotiation process.
This type of clause is relatively common in franchise agreements to protect both the franchisor and franchisee. It helps ensure transparency and fairness in the franchise sales process, while also providing franchisees with legal recourse if misrepresentations occur. Franchisees should carefully review all documents and statements made during the franchise sales process and consult with an attorney if they have any concerns.