Does the Virginia Retail Franchising Act affect the standard Craters & Freighters franchise agreement?
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.
In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for Craters & Freighters Franchise Company for use in the Commonwealth of Virginia shall be amended as follows:
Additional Disclosure. The following statements are added to Item 17.h.
Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the Franchise Agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable."
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, the Virginia Retail Franchising Act does affect the standard franchise agreement within the Commonwealth of Virginia. The FDD specifies that no statement signed by a franchisee can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on franchisor statements. This provision takes precedence over any conflicting terms in the franchise agreement.
Specifically, the Craters & Freighters Franchise Disclosure Document for use in Virginia is amended to include an additional disclosure in Item 17.h, addressing franchise termination. This disclosure states that it is unlawful for Craters & Freighters to cancel a franchise without reasonable cause, as defined by the Virginia Retail Franchising Act. If any termination grounds in the Franchise Agreement do not meet this definition of "reasonable cause" under Virginia law, those provisions may not be enforceable.
This means that Craters & Freighters franchisees in Virginia have additional protections under state law regarding the termination of their franchise agreements. Prospective franchisees in Virginia should carefully review these specific amendments and understand their rights under the Virginia Retail Franchising Act, especially concerning what constitutes "reasonable cause" for termination. This ensures that the franchisee is aware of the legal standards that will govern their relationship with Craters & Freighters in Virginia.