In Minnesota, can a franchisee waive claims of fraud in the inducement against Crisp & Green?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
Notwithstanding anything to the contrary set forth in the Crisp & Green Franchising LLC Area Development Agreement, the following provisions shall supersede and apply to all Crisp & Green franchises offered and sold in the state of Minnesota:
This Minnesota Addendum is only applicable if you are a resident of Minnesota or if your business will be located in Minnesota.
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- Franchisor shall not require Developer to assent to a release, assignment, novation or waiver that would relieve any person from liability imposed by Minnesota Statutes, Sections 80C.01 to 80C.22, provided that the foregoing shall not bar the voluntary settlement of disputes
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- No statement, questionnaire, or acknowledgement 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 with the franchise.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, if you are a franchisee in Minnesota, you cannot waive claims of fraud in the inducement. The Minnesota Addendum to the Area Development Agreement explicitly states that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under any applicable state franchise law, including fraud in the inducement. This provision overrides any other conflicting terms in any document related to the franchise agreement. This protection is specifically designed to safeguard franchisees' rights under Minnesota law.
This means that any attempt by Crisp & Green to include a clause in the franchise agreement that requires a franchisee to waive their right to sue for fraud in the inducement would be unenforceable in Minnesota. This is a significant benefit for franchisees as it ensures they retain the right to seek legal recourse if they believe they were misled into investing in the franchise. The FDD highlights that this protection is in place to ensure franchisees are not taken advantage of during the initial stages of the franchise relationship.
Furthermore, the addendum emphasizes compliance with Minnesota Statutes, reinforcing the state's commitment to protecting franchisees. Specifically, the document references Minn. Stat. Section 80C.21 and Minn. Rule 2860.4400J, which prohibit Crisp & Green from requiring litigation to occur outside of Minnesota. It also references Minn. Stat. Section 80C.14, subds. 3, 4, and 5, which mandates that developers receive a 90-day notice of termination (with 60 days to cure), except in certain specified cases. These regulations collectively ensure that franchisees in Minnesota have strong legal protections and recourse options.