For Cinch I.T., what is the effective date and amendment status of the franchise offering in Virginia?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
ADDENDUM TO CINCH FRANCHISE, LLC FRANCHISE DISCLOSURE DOCUMENT
REQUIRED BY THE COMMONWEALTH OF VIRGINIA
- In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for Cinch Franchise, LLC for use in the Commonwealth of Virginia shall be amended as follows:
The following statements are added to Item 17.h under the subheading Franchise Agreement of the Virginia Disclosure Document:
"Under Section 13.1.564 of the Virginia Franchising Act, it is unlawful for a franchisor to cancel a franchise agreement without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause" as that term may be defined in the Virginia Retail Franchising Act or laws of Virginia, that provision may not be enforceable.
- In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for Cinch Franchise, LLC for use in the Commonwealth of Virginia shall be amended as follows:
The following statements are added to Item 17.h under the subheading Area Development Agreement of the Virginia Disclosure Document:
"Pursuant to Section 13.1.564 of the Virginia Franchising Act, it is unlawful for a franchisor to cancel a franchise agreement without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause" as that term may be defined in the Virginia Retail Franchising Act or laws of Virginia, that provision may not be enforceable.
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.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the franchise offering in Virginia requires specific amendments to comply with the Virginia Retail Franchising Act. These amendments primarily concern Item 17.h of the Franchise Disclosure Document, specifically addressing the conditions under which Cinch I.T. can cancel a franchise agreement. The amendments clarify that any grounds for default or termination stated in the franchise agreement must constitute "reasonable cause" as defined by Virginia law. If any provision does not meet this standard, it may not be enforceable.
The addendum also states that no agreement signed by a franchisee can waive claims under Virginia franchise law, including claims related to fraud or reliance on statements made by Cinch I.T. or its representatives. This provision supersedes any conflicting terms in any document executed in connection with the franchise.
In practical terms, these amendments provide additional protection to franchisees in Virginia, ensuring that Cinch I.T. cannot terminate a franchise agreement without reasonable cause as defined by Virginia law. It also prevents franchisees from unknowingly waiving their rights under state law through standard contract clauses. This suggests that Virginia has specific regulations in place to protect franchisees, and Cinch I.T. is adhering to those regulations by amending its standard franchise agreement for use in the Commonwealth of Virginia.