What is the purpose of the State Specific Addendum to the Cr3 American Exteriors Disclosure Document?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
u must sign, date and deliver one copy of the Receipt Page to us for our records.
EXHIBIT A-STATE SPECIFIC ADDENDA TO THE FRANCHISE DISCLOSURE DOCUMENT AND FRANCHISE AGREEMENT
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 inconsistent with the provisions of Corporations Code Sections 31303 and 31304.
You must sign a general release if you renew or transfer your franchise. California Corporation Code 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code 31000 through 31516). Business and Professions Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043).
THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.
The Franchise Agreement contains a liquidated damages clause. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
OUR WEBSITE, www.cr3america.com, HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF FINANCIAL PRETECTION AND INNOVATION. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION at www.dfpi.ca.gov.
The highest interest rate allowed by law in California is ten percent (10%) annually.
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to the 2025 Cr3 American Exteriors Franchise Disclosure Document, the State Specific Addendum modifies the standard franchise agreement to comply with specific state laws. This addendum is crucial because franchise laws vary significantly from state to state, and the standard agreement might conflict with local regulations. The FDD states that the addendum applies to individuals residing or operating a Cr3 American Exteriors franchise in California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, South Dakota, Rhode Island, Virginia, Washington, and Wisconsin.
For example, the addendum addresses specific legal provisions in California, such as those related to termination, transfer, or non-renewal of a franchise, ensuring that California law takes precedence over any conflicting terms in the standard franchise agreement. Similarly, the addendum acknowledges that certain provisions, like termination upon bankruptcy or non-compete covenants extending beyond the agreement's termination, may not be enforceable under California law. This ensures that Cr3 American Exteriors franchisees in California are aware of their rights and the limitations of certain clauses in the franchise agreement.
In Maryland, the addendum modifies Item 17.v of the FDD and Section 9.8.A of the Franchise Agreement to specify that claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise. It also modifies Item 5 of the FDD and Section 4.1 of the FA to defer initial fees and payments until Cr3 American Exteriors completes its pre-opening obligations and the outlet is opened, due to a financial assurance required by the Maryland Securities Commissioner. Furthermore, the addendum clarifies that no agreement signed by a franchisee can waive claims under Maryland franchise law or disclaim reliance on statements made by Cr3 American Exteriors. In Michigan, the addendum states that certain unfair provisions that are sometimes in franchise documents are void and cannot be enforced against the franchisee.
Prospective Cr3 American Exteriors franchisees should carefully review the State Specific Addendum to understand how it modifies the standard franchise agreement in their state. This ensures they are fully aware of their rights and obligations under local laws. Franchisees should also consult with a legal professional to discuss any concerns or questions regarding the addendum and its implications for their specific situation.