For Cream franchises in Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, or Wisconsin, does the disclaimer of reliance on statements made by the franchisor hold up in court?
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, for franchises located in Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, or Wisconsin, any statement, questionnaire, or acknowledgment signed by the franchisee at the start of the franchise relationship cannot waive claims under state franchise law. This includes claims related to fraud in the inducement or disclaiming reliance on statements made by Cream or its representatives. This provision takes precedence over any conflicting terms in franchise documents.
In practical terms, this means that if a Cream franchisee in these states believes they were misled by statements made by Cream during the franchise sales process, they are not prevented from pursuing legal action based on those misrepresentations, even if they signed documents seemingly disclaiming reliance on such statements. This protection is afforded by state franchise laws in these specific states.
This clause provides an added layer of protection for franchisees in these states, ensuring they retain their legal rights to pursue claims of fraud or misrepresentation, which is a significant benefit. Franchisees should still carefully review the FDD and all related documents, and conduct their own independent due diligence, but this provision offers recourse if they later discover they were provided with misleading information.