For Cinnaholic franchises, what happens to provisions that deny reliance by a franchisee on representations made by the franchisor's agents?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Any provision of a franchise agreement, franchise disclosure document, acknowledgement, questionnaire, or other writing, including any exhibit thereto, disclaiming or denying any of the following shall be deemed contrary to public policy and shall be void and unenforceable:
- (a) Representations made by the franchisor or its personnel or agents to a prospective franchisee.
- (b) Reliance by a franchisee on any representations made by the franchisor or its personnel or agents.
- (c) Reliance by a franchisee on the franchise disclosure document, including any exhibit thereto.
- (d) Violations of any provision of this division.
-
- Franchisor and Franchisee agree to be bound by the provisions of any limitation on the period of time in which claims must be brought under applicable law or this Agreement, whichever expires earlier.
-
- 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
-
- To the extent this Addendum is inconsistent with any terms or conditions of the Agreement or the Exhibits or Schedules thereto, the terms of this Addendum shall govern.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, any provision in a franchise agreement, franchise disclosure document, or other writing that disclaims or denies reliance by a franchisee on representations made by Cinnaholic or its agents is considered contrary to public policy and will be void and unenforceable. This means that Cinnaholic franchisees are legally entitled to rely on the representations made by the franchisor and its representatives during the franchise sales process.
This protection ensures that prospective Cinnaholic franchisees are not bound by clauses that prevent them from claiming they relied on information provided by the franchisor. Such clauses are often seen as unfair because they can shield the franchisor from liability for misrepresentations or misleading statements.
Several states, including Washington, Illinois, New York, and Virginia, have specific addenda that reinforce these protections, particularly concerning waivers and disclaimers of reliance. These addenda ensure that franchisees in those states retain their rights to make claims under state franchise laws, including claims of fraud in the inducement, and that they cannot waive compliance with franchise laws. This is a beneficial provision for prospective franchisees, as it protects their rights to take legal action if they believe they were misled during the franchise sales process.