Can a franchisee claim reliance on visual representations about earnings potential from Desi District that contradict the Disclosure Document?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
By signing this Agreement, Franchisee acknowledges the following:
- (1) Franchisee understands all the information in Desi District Franchise Group's Disclosure Document.
- (2) Franchisee understands the success or failure of the Business will depend in large part upon Franchisee's skills, abilities and efforts and those of the persons Franchisee employs, as well as many factors beyond Franchisee's control such as weather, competition, interest rates, the economy, inflation, labor and supply costs, lease terms, and the marketplace.
- (3) That no person acting on Desi District Franchise Group's behalf made any statement or promise regarding the costs involved in operating a Desi District franchise that is not in the Disclosure Document or that is contrary to, or different from, the information in the Disclosure Document.
- (4) That no person acting on Desi District Franchise Group's behalf made any claim or representation to Franchisee, orally, visually, or in writing, that contradicted the information in the Disclosure Document.
- (5) That no person acting on Desi District Franchise Group's behalf made any statement or promise regarding the actual, average or projected profits or earnings, the likelihood of success, the amount of money Franchisee may earn, or the total amount of revenue a Desi District franchise will generate, that is not in the Disclosure Document or that is contrary to, or different from, the information in the Disclosure Document.
- (6) That no person acting on Desi District Franchise Group's behalf made any statement or promise or agreement, other than those matters addressed in this Agreement, concerning advertising, marketing, media support, market penetration, training, support service, or assistance that is contrary to, or different from, the information contained in the Disclosure Document.
- (7) Franchisee understands that this Agreement contains the entire agreement between Desi District Franchise Group and Franchisee concerning the Desi District franchise, which means that any oral or written statements not set out in this
Agreement will not be binding. In deciding to enter into this Agreement, Franchisee is not relying on any statement, promise, claim, or representation not expressly set forth in this Agreement or in the Disclosure Document.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, a franchisee cannot claim reliance on visual representations about earnings potential that contradict the information provided in the Disclosure Document. By signing the Franchise Agreement, the franchisee acknowledges that no one acting on Desi District's behalf made any claim or representation, orally, visually, or in writing, that contradicted the information in the Disclosure Document. This includes statements or promises regarding actual, average, or projected profits or earnings.
This provision is designed to protect Desi District from franchisees later claiming they were misled by representations outside of the official FDD. It reinforces that the FDD is the primary source of information and that prospective franchisees should rely on the documented information when making their investment decision. This is a common practice in franchising to ensure transparency and avoid misunderstandings.
The franchisee also acknowledges that the success or failure of the business depends largely on their own skills, abilities, and efforts, as well as other factors beyond their control. This includes weather, competition, interest rates, the economy, inflation, labor and supply costs, lease terms, and the marketplace. This acknowledgement highlights the inherent risks in any business venture and emphasizes that Desi District cannot guarantee any specific level of profitability.
Furthermore, the agreement states that it contains the entire agreement between Desi District and the franchisee, meaning any oral or written statements not set out in the agreement or the Disclosure Document are not binding. In deciding to enter into the agreement, the franchisee is not relying on any statement, promise, claim, or representation not expressly set forth in the agreement or in the Disclosure Document. This clause further protects Desi District from claims based on undocumented representations.