What does the Engel & Volkers Multi-State Amendment supersede in the Franchise Agreement?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
This Amendment pertains to franchises sold in the states that have adopted as law the NASAA Statement of Policy Regarding the Use of Franchise Questionnaires and Acknowledgements (the "SOP") and is for the purpose of complying with the statutes and regulations of such states. Signing this Amendment where the SOP, because applicable jurisdictional requirements are not met, does not subject the parties to the provisions of the SOP. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended to include the following:
Franchisor and Franchisee hereby agree that the Franchise Agreement dated
, 20, will be amended as follows: 1. The following language is added immediately before the signature block of the Franchise Agreement: "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 (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 in connection with the franchise."
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the Multi-State Amendment addresses franchise sales in states that have adopted the NASAA Statement of Policy. The amendment ensures compliance with these states' statutes and regulations.
Specifically, the Multi-State Amendment includes a provision that supersedes any other term in any document executed in connection with the franchise. This provision states that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under applicable state franchise law, including claims related to fraud in the inducement. It also prevents the disclaimer of reliance on any statement made by Engel & Volkers, its sellers, or representatives.
In practical terms, this means that Engel & Volkers franchisees in states covered by the Multi-State Amendment retain their rights under state franchise laws, regardless of any agreements or acknowledgments they may have signed. This offers franchisees additional protection against potentially misleading or fraudulent statements made during the franchise sales process. This type of clause is common in franchise agreements to ensure compliance with state-specific franchise laws and to protect the franchisee's rights.