What is the relationship between the State Specific Addendum and the Franchise Agreement for Cr3 American Exteriors?
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.
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, the State Specific Addendum modifies the Franchise Agreement to comply with applicable state laws. The addendum supersedes certain portions of the Franchise Agreement to the extent required by state law. This ensures that the franchise operates in compliance with the specific regulations of the state in which the franchisee is located.
The State Specific Addendum applies only to individuals residing or operating a Cr3 American Exteriors franchise in specific states: California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, South Dakota, Rhode Island, Virginia, Washington, and Wisconsin. For example, in California, certain sections of the California Business and Professions Code provide franchisees with specific rights regarding termination, transfer, or non-renewal of a franchise. If any provision in the Franchise Agreement is inconsistent with California law, the state law will take precedence.
Furthermore, the addendum clarifies that certain provisions in the Franchise Agreement, such as those related to termination upon bankruptcy or non-compete covenants extending beyond the agreement's termination, may not be enforceable under federal or California law, respectively. The addendum also references Section 31125 of the California Corporation Code, which mandates that Cr3 American Exteriors provide a disclosure document to the franchisee before any material modification to an existing franchise agreement is made.
Prospective franchisees should carefully review the State Specific Addendum to understand how it modifies the standard Franchise Agreement in their state. This is particularly important for franchisees in the listed states, as the addendum directly addresses how state laws impact the terms and enforcement of the agreement. Understanding these modifications is crucial for ensuring compliance and protecting the franchisee's rights under both the franchise agreement and state law.