Does the Virginia Addendum to the Desi District Disclosure Document amend Item 17(h)?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
In the Commonwealth of Virginia only, this Disclosure Document is amended as follows:
The following statements are added to Item 17(h):
Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the Franchise Agreement do not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to use undue influence to induce a franchisee to surrender any right given to him under the franchise. If any provision of the Franchise Agreement involves the use of undue influence by the franchisor to induce a franchisee to surrender any rights given to the franchisee under the franchise, that provision may not be enforceable.
Item 17(t) is amended to read as follows:
Only the terms of the Franchise Agreement and other related written agreements are binding (subject to applicable state law). Any representations or promises outside of the Disclosure Document and Franchise Agreement may not be enforceable.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
According to the 2024 Desi District Franchise Disclosure Document, the Virginia Addendum does amend Item 17(h). Specifically, the addendum includes statements related to the Virginia Retail Franchising Act. It clarifies that it is unlawful for Desi District to cancel a franchise without reasonable cause, as defined by the Act or Virginia laws. If any termination grounds in the Franchise Agreement do not meet this standard of "reasonable cause", they may not be enforceable in Virginia. This provides additional protection to franchisees in Virginia regarding franchise termination.
Additionally, the Virginia Addendum states that it is unlawful for Desi District to use undue influence to induce a franchisee to surrender any rights granted under the franchise. If any provision in the Franchise Agreement involves such undue influence, that provision may also be unenforceable. This aims to protect franchisees from being coerced into giving up their legal rights.
Furthermore, Item 17(t) is amended to clarify that only the terms of the Franchise Agreement and other related written agreements are binding, subject to applicable state law. This means that any representations or promises made outside of the Disclosure Document and Franchise Agreement may not be enforceable. This emphasizes the importance of having all agreements and understandings documented in writing to ensure enforceability.