For Cinnaholic franchises, what is the effect of a franchisee signing a questionnaire regarding fraud in the inducement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
ake 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. See NASAA STATEMENT OF POLICY REGARDING THE USE OF FRANCHISE QUESTIONNAIRES AND ACKNOWLEDGMENTS. https://www.nasaa.org/wp-content/uploads/2022/11/sop-franchisequestionnaires.pdf
You are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedures Section 1281, and the Federal Arbitration Act) to any provisions of a Franchise Agreement or Development Agreement restricting venue to a forum outside the state of California.
The registration of this franchise offering by the California Department of Financial Protection and Innovation does not constitute approval, recommendation, or endorsement by the commissioner.
.
ADDENDUM REQUIRED BY THE STATE OF ILLINOIS
-
- Illinois law governs the Franchise Agreement(s).
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, any questionnaire signed by a franchisee in connection with starting their franchise will not waive claims related to state franchise law, including fraud in the inducement. This means that even if a franchisee signs a document that seems to disclaim reliance on statements made by Cinnaholic or its representatives, the franchisee still retains the right to pursue legal action for fraud. This protection supersedes any conflicting terms in any document related to the franchise agreement.
This provision is particularly relevant because Cinnaholic uses a Franchisee Disclosure Questionnaire. This questionnaire aims to identify any unauthorized or untrue statements made to the franchisee and to ensure the franchisee understands the limitations on claims they can make. Franchisees must sign this questionnaire on the same day they sign the Development Agreement and/or Franchise Agreement and pay their development and/or franchise fee, but not on the same day as receiving the Franchise Disclosure Document.
Several state-specific addenda reinforce this protection. For example, addenda for Illinois, Virginia, and Washington explicitly state that no questionnaire or acknowledgment can waive claims of fraud in the inducement. These addenda modify and supersede the standard franchise agreement to ensure compliance with state laws, further safeguarding the franchisee's rights. Prospective franchisees should carefully review these addenda, if applicable to their state, to understand the full scope of their protections under state law.