What is the 'Franchisee Bill of Rights' and how does it affect the Cr3 American Exteriors franchise agreement?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
The following State Specific Addendum applies to the Tectum Franchising LLC d/b/a CR3 American Exteriors Disclosure Document and may supersede, to the extent then required by valid applicable state law, certain portions of the Franchise Agreement dated and all related agreements.
The provisions of this State Specific Addendum to Franchise Disclosure Document and Franchise Agreement apply only to those persons residing or operating CR3 American Exteriors LLC in the following states: California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, South Dakota, Rhode Island, Virginia, Washington, and Wisconsin.
CALIFORNIA
California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning termination, transfer, or non-renewal of a franchise. If the Franchise Agreement or Agreement contains provisions that are inconsistent with the law, the law will control.
The Franchise Agreement provide for termination upon bankruptcy. This provision may not be enforceable under Federal Bankruptcy Law (11 U.S.C.A. Sec. 101 et. seq.).
The Franchise Agreement contain covenants not to compete which extend beyond the termination of the agreements. These provisions may not be enforceable under California law.
Section 31125 of the California Corporation Code requires the franchisor to provide you with a disclosure document before asking you to agree to a material modification of an existing franchise.
Neither the franchisor, any person or franchise broker in Item 2 of the Disclosure Document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 79a et. seq., suspending or expelling such persons from membership in such association or exchange.
Prospective franchisees 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 Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
The Franchise Agreement require application of the laws of Virginia. This provision may not be enforceable under California law.
The franchise agreement requires a shortened statute of limitations period. Pursuant to Corporations Code Section 31512, this provision is void, to the extent that it is inconsis
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Cr3 American Exteriors does not explicitly define a 'Franchisee Bill of Rights.' However, Exhibit A, titled 'State Specific Addenda to the Franchise Disclosure Document and Franchise Agreement,' addresses how certain state laws may provide rights to franchisees that supersede the standard franchise agreement. These addenda apply to individuals residing or operating a Cr3 American Exteriors franchise in specific states, including California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, South Dakota, Rhode Island, Virginia, Washington, and Wisconsin.
For example, the California addendum notes that California Business and Professions Code Sections 20000 through 20043 provide rights to franchisees concerning termination, transfer, or non-renewal of a franchise. It clarifies that if the franchise agreement contains provisions inconsistent with California law, the law will take precedence. Additionally, certain provisions in the standard Cr3 American Exteriors franchise agreement, such as those allowing termination upon bankruptcy or those containing non-compete covenants extending beyond the agreement's termination, may not be enforceable under California law.
Furthermore, California Corporations Code Section 31125 mandates that Cr3 American Exteriors provide a disclosure document to the franchisee before requesting agreement to any material modification of an existing franchise. The addendum also addresses venue restrictions, stating that prospective franchisees should seek legal counsel to determine the applicability of California and federal laws to any franchise agreement provisions that restrict venue to a forum outside of California. The franchise agreement requires application of the laws of Virginia, but this may not be enforceable under California law, and the franchise agreement requires a shortened statute of limitations period, which is void to the extent that it is inconsistent.
In summary, while Cr3 American Exteriors does not have a document called the 'Franchisee Bill of Rights,' the state-specific addenda to the franchise agreement serve a similar purpose by outlining how state laws can modify or supersede certain provisions of the standard agreement to protect franchisees' rights. Prospective franchisees should carefully review the addendum for their specific state and consult with legal counsel to understand their rights and obligations fully.