Does the provision regarding waiver of claims apply to all documents related to the Cream franchise, or only specific ones?
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 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 the 2025 FDD, the waiver of claims provision within the Cream franchise agreement does not apply uniformly to all documents. Instead, its applicability is limited and subject to specific conditions and state laws. For franchisees in Illinois, Indiana, Maryland, Michigan, Minnesota, Virginia, or Wisconsin, any statement, questionnaire, or acknowledgment signed in connection with starting the franchise cannot waive claims under applicable state franchise laws, including fraud in the inducement, or disclaim reliance on statements made by Cream or its representatives. This specific provision overrides any other conflicting terms in any document related to the franchise.
Furthermore, the FDD outlines that if a Cream franchised business is located in Maryland, or if the franchisee is a resident of Maryland, any general release provided in the franchise agreement will not apply to liabilities arising under the Maryland Franchise Registration and Disclosure Law. Similarly, for franchisees operating in Minnesota, any release required as a condition of renewal or assignment/transfer will not apply to the extent prohibited by the Minnesota Franchises Law. These stipulations ensure that franchisees in these states retain certain legal rights and protections, regardless of any general release or waiver clauses in the franchise agreement.
For franchisees in California, the FDD includes a specific acknowledgment of California Civil Code Section 1542, which addresses the release of unknown claims. By acknowledging this section, franchisees are agreeing to waive their rights to claims they are unaware of at the time of signing the release. However, this waiver is contingent on the franchisee having consulted with legal counsel and understanding the implications of waiving these rights. This highlights the importance of seeking legal advice before signing any franchise agreement, particularly concerning release and waiver provisions, as the extent and enforceability of these provisions can vary significantly based on state laws and individual circumstances.