What is the effect of a franchisee signing a statement disclaiming reliance on statements made by the franchisor related to a City Publications franchise?
City_Publications Franchise · 2025 FDDAnswer from 2025 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.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, a franchisee's signed statement, questionnaire, or acknowledgment disclaiming reliance on any statement made by City Publications, its sellers, or representatives does not waive claims under applicable state franchise law. This includes claims related to fraud in the inducement. This provision overrides any conflicting terms in any document associated with the franchise agreement.
This means that even if a City Publications franchisee signs a document stating they did not rely on the franchisor's statements when deciding to invest, they still retain the right to pursue legal claims based on those statements, especially if they believe they were fraudulently induced into the agreement. This protection is particularly relevant in states with franchise laws designed to protect franchisees from overreaching by franchisors.
Several states, including Virginia, New York, and Washington, have specific addenda reinforcing this protection. For example, Virginia's Retail Franchising Act and Washington's Franchise Investment Protection Act contain provisions ensuring that franchisees cannot waive their rights or disclaim reliance on franchisor statements. New York also has similar provisions under its General Business Law. These state-specific regulations highlight the importance of franchisees understanding their rights and protections under the laws of their respective states.
This clause is significant for prospective City Publications franchisees as it prevents the franchisor from using a disclaimer to avoid liability for misrepresentations or misleading statements made during the franchise sales process. Franchisees should still conduct thorough due diligence and seek legal counsel, but this provision offers an additional layer of protection against potential fraud or misrepresentation by City Publications.