For Cream franchises in Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, or Wisconsin, can a franchisee waive claims under state franchise law?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The following provision applies if you or the franchise granted hereby are subject to the franchise laws in Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, or Wisconsin: 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 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a franchisee is subject to franchise laws in Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, or Wisconsin, they cannot waive claims under applicable state franchise law. This means that any statement, questionnaire, or acknowledgment signed by the franchisee at the start of their franchise relationship cannot waive these rights. This includes claims related to fraud in the inducement or disclaiming reliance on statements made by Cream or its representatives.
This provision is designed to protect franchisees in these states by ensuring they retain their legal rights under state franchise laws. It prevents Cream from using standardized documents to inadvertently or intentionally limit a franchisee's ability to pursue legal claims. The FDD explicitly states that this provision supersedes any other conflicting terms in any document related to the franchise agreement.
For prospective Cream franchisees in these states, this is a beneficial clause. It ensures that they cannot unknowingly give up their rights to sue Cream for violations of state franchise laws. Franchisees should still carefully review all documents and seek legal advice, but this provision offers an additional layer of protection. This type of clause is not uncommon in franchise agreements, particularly in states with strong franchise protection laws, as it aims to balance the franchisor's and franchisee's interests.