Is the Exit FDD receipt acknowledgement considered part of the franchise agreement?
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 the 2025 Exit FDD, any statements, questionnaires, or acknowledgments signed by a franchisee related to the start of the franchise relationship do not waive claims under state franchise law, including fraud, or disclaim reliance on franchisor statements. This provision overrides any conflicting terms in any document related to the franchise. This means that while a franchisee may be asked to sign acknowledgements or questionnaires, these documents do not supersede the protections provided by franchise laws.
This clause protects the franchisee from inadvertently waiving legal rights through routine paperwork. It ensures that franchisees can still pursue legal claims, even if they have signed documents that might suggest otherwise. This is a standard protection in franchising to prevent franchisors from using acknowledgements to shield themselves from liability.
In practical terms, this means that if an Exit franchisee believes they were misled or defrauded during the franchise sales process, they can still pursue legal action, regardless of any acknowledgements they may have signed. This provision aims to balance the power dynamic between franchisor and franchisee, ensuring that franchisees are not disadvantaged by complex legal documents.