Is the validity of the Exit FDD receipt acknowledgement dependent on the accuracy of the FDD itself?
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, Item 43 addresses statements, questionnaires, and acknowledgments signed by a franchisee. Specifically, it states that no such document shall waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Exit or its representatives. This provision takes precedence over any conflicting terms in other documents related to the franchise agreement.
In practical terms, this means that even if a franchisee signs a receipt acknowledging they received the FDD, that acknowledgement cannot be used to prevent them from later claiming they were misled or that the FDD contained fraudulent information. The franchisee's right to pursue legal claims related to the franchise agreement is protected, regardless of any acknowledgments signed.
This clause is beneficial for prospective Exit franchisees as it ensures they retain their legal rights and recourse, even after signing acknowledgments or other documents during the franchise commencement process. It prevents Exit from using these documents to shield itself from liability in cases of misrepresentation or fraud. This protection is fairly standard in franchise agreements, as franchise laws are designed to protect franchisees from potential abuses of power by franchisors.