Does the North Carolina addendum for Cinnaholic franchises allow a franchisee to disclaim reliance on statements made by the franchisor or their representatives?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM REQUIRED BY THE STATE OF NORTH CAROLINA
The State of North Carolina has not reviewed and does not approve, recommend, endorse or sponsor any business opportunity. The information contained in this disclosure has not been verified by the State. If you have any questions about this investment, see an attorney before you sign a contract or agreement. If the seller fails to deliver the product(s), equipment or supplies necessary to begin substantial operation of the business within 45 days of the delivery date stated in your contract, you may notify the seller in writing and demand that the contract be cancelled.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, the addendum required by the state of North Carolina includes a statement that the state has not reviewed or approved the business opportunity. It advises potential franchisees to seek legal counsel and addresses the scenario where the seller fails to deliver necessary products or equipment within 45 days of the agreed delivery date, allowing the franchisee to demand contract cancellation in writing. However, the North Carolina addendum does not contain language that addresses whether a franchisee can disclaim reliance on statements made by Cinnaholic or its representatives.
Several other state addenda included in the Cinnaholic FDD contain specific stipulations regarding a franchisee's ability to waive claims or disclaim reliance on statements made by the franchisor. For example, the addenda for South Carolina, Virginia, Maryland, and Washington state that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by the franchisor or their representatives. These provisions explicitly supersede any conflicting terms in the franchise agreement.
Because the North Carolina addendum does not contain similar language, prospective Cinnaholic franchisees in North Carolina should seek clarification from Cinnaholic regarding their ability to rely on statements made by the franchisor. It would be prudent to consult with legal counsel to understand their rights and protections under North Carolina franchise law, especially concerning potential misrepresentations or fraud.