What is the Craters & Freighters franchisee acknowledging regarding reliance on representations?
Craters_Freighters 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 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, franchisees in certain states are protected by state laws that prevent them from waiving claims of fraud or disclaiming reliance on franchisor statements made during the franchise sales process. Specifically, the FDD states that in California, Illinois, Minnesota, Virginia, and Washington, no signed statement can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on franchisor statements. This protection supersedes any conflicting terms in the franchise agreement.
This means that Craters & Freighters franchisees in these states retain the right to pursue legal action if they believe they were misled by the franchisor's representations, even if they signed documents suggesting otherwise. This is a significant protection for franchisees, as it ensures they can hold the franchisor accountable for their statements and actions during the franchise sales process. It also means that Craters & Freighters cannot use standard contract language to shield themselves from liability for misrepresentations made to induce someone to buy a franchise in those states.
For prospective Craters & Freighters franchisees in these states, this provision offers some security. It allows them to enter the franchise agreement with the understanding that they have legal recourse if the franchisor's pre-sale promises or representations turn out to be false or misleading. However, franchisees should still conduct thorough due diligence and seek legal counsel to fully understand their rights and obligations under the franchise agreement and applicable state laws. It is important to note that these protections may not extend to franchisees in other states, so the specific laws of the state governing the franchise agreement are crucial.