What is the effect of signing the Exit FDD receipt acknowledgement on the franchisee's legal rights?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
43. STATEMENTS, QUESTIONNAIRES AND ACKNOWLEDGMENTS
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 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, signing any statement, questionnaire, or acknowledgment related to the franchise commencement does not waive claims under state franchise law, including fraud in the inducement. Furthermore, it does not disclaim reliance on statements made by Exit, franchise sellers, or anyone acting on Exit's behalf. This provision takes precedence over any conflicting terms in any document executed during the franchise agreement.
This means that even after signing documents acknowledging receipt of information or completing questionnaires, an Exit franchisee retains their legal rights to pursue claims related to franchise law violations. This includes claims of fraudulent inducement, where the franchisee alleges they were misled into investing in the franchise based on false representations made by Exit.
This protection is significant for prospective Exit franchisees as it ensures they are not inadvertently giving up their legal recourse by signing standard documents during the initial stages of the franchise relationship. It allows franchisees to hold Exit accountable for their representations and actions, even after the franchise agreement is in effect. This type of clause is not universally included in franchise agreements, so it represents a potential benefit for Exit franchisees.
It is important for franchisees to consult with an attorney to fully understand their rights and obligations under the franchise agreement and applicable state laws. While this clause protects against unintentional waiver of rights, it does not replace the need for careful due diligence and legal advice before investing in a franchise.