If the Cream franchise is subject to franchise laws in Michigan, can a franchisee disclaim reliance on statements made by the franchisor?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The following provision applies if you or the franchise granted hereby are subject to the franchise registration or disclosure 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 (1) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (2) 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 Michigan, they cannot disclaim reliance on statements made by the franchisor. This protection extends to instances of fraud in the inducement. This means that any statement, questionnaire, or acknowledgment signed by the franchisee related to the start of the franchise relationship will not waive claims under state franchise law or disclaim reliance on statements made by the franchisor or their representatives.
This provision is designed to protect franchisees in states with franchise registration or disclosure laws, including Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, and Wisconsin. It ensures that franchisees can pursue legal remedies if they believe they were misled during the franchise sales process, regardless of any disclaimers they may have signed. This protection supersedes any conflicting terms in the franchise agreement or related documents.
For a prospective Cream franchisee in Michigan, this means that any attempt by Cream to enforce a clause where the franchisee acknowledges they did not rely on any statements outside of the FDD would be unenforceable. This offers a degree of security, allowing franchisees to address potential misrepresentations made during the franchise sales process. However, franchisees should still meticulously document all communications and representations made by the franchisor during the pre-sale period.