Does the Deka Lash franchise agreement allow franchisees to disclaim reliance on statements made by the franchisor or their representatives?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
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 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, the franchise agreement includes provisions that address a franchisee's reliance on statements made by the franchisor or its representatives. Specifically, the FDD indicates that certain documents signed by the franchisee cannot waive claims under applicable state franchise law, including claims related to fraud in the inducement, or disclaim reliance on statements made by the franchisor or individuals acting on their behalf. This clause is designed to override any other conflicting terms within the franchise agreement. However, the closing acknowledgements contain language where Deka Lash attempts to confirm the franchisee is not relying on any oral statement, representation, promise or assurance made during negotiations that is not specifically reported in the Franchise Disclosure Document.
This means that while Deka Lash includes a clause where the franchisee acknowledges they are not relying on outside information, certain state laws and the franchise agreement itself may protect the franchisee from waiving their right to claim they relied on misrepresentations, especially those that constitute fraud. This is particularly relevant during the pre-sale negotiation phase, where prospective franchisees might receive information that influences their decision to invest.
However, certain states such as California and Hawaii, Deka Lash will not have residents or prospective franchisees purchasing a territory in those states execute the closing acknowledgement.
Prospective Deka Lash franchisees should consult with a legal professional to fully understand their rights and obligations, especially concerning statements made during the franchise sales process. It is important to document all communications and representations made by the franchisor or its representatives to ensure these can be referenced should any disputes arise later.