Are the Expense Reduction Analysts State Addenda required to be included in the FDD?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
-----|-------------|---------------| | | | | Number | | Haske Consulting, LLC | | | | | | Linda Haske | Danbury, CT | 203-300-9988- |
EXHIBIT E STATE ADDENDA
ADDENDUM TO EXPENSE REDUCTION ANALYSTS, INC. REGIONAL FRANCHISE DISCLOSURE DOCUMENT AND FRANCHISE AGREEMENT FOR THE STATE OF CALIFORNIA
The following applies to franchises and franchisees subject to California statutes and regulations. The Item number corresponds to those in the main body.
Neither the franchisor, nor any person or franchise broker identified in Item 2 of this Disclosure Document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling the person from membership in the association or exchange.
The registration of this franchise offering by the California Department of Financial Protection and Innovation does not constitute approval, recommendation, or endorsement by the commissioner.
California Business and Professions Code §§ 20034 through 20043 provide rights to the franchisee concerning termination, transfer or non-renewal of a franchise. If the Franchise Agreement contains a provision that is inconsistent with the law, the law will control.
The Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec. 101 et seq.).
The Franchise Agreement contains a covenant not to compete that continues after the termination of the franchise. This provision may not be enforceable under California law.
Under both the California Franchise Relations Act and the Franchise Investment Law, a provision in a Franchise Agreement that requires you to waive your rights under either or both of these laws is void. Any release of claims that the franchisor asks you to sign will specifically exclude claims under these franchise laws.
No disclaimer, questionnaire, clause, or statement signed by a franchisee in connection with the commencement of the franchise relationship shall be construed or interpreted as waiving any claim of fraud in the inducement, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a material inducement to a franchisee's investment. Any statements or representations signed by a franchisee purporting to understand any fact or its legal effect shall be deemed made only based upon the franchisee's understanding of the law and facts as of the time of the franchisee's investment decision. This provision supersedes any other or inconsistent term of any document executed in connection with the franchise.
The highest interest rate allowed by law for Late Payments in the State of California is 10% annually.
The Franchise Agreement requires application of the law of Texas and a forum of Dallas, Texas. These provisions may not be enforceable under California law.
Section 31125 of the California Corporations Code requires the franchisor to give the franchise a special disclosure document before soliciting a proposed material modification of an existing franchise.
Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Profession Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
OUR WEBSITE ADDRESS IS HTTP://WWW.EXPENSEREDUCTION.COM. OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION AT WWW.DFPI.CA.GOV.
THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF EACH PROPOSED AGREEMENT RELATING TO THE GRANT OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
Yes, according to Expense Reduction Analysts' 2025 Franchise Disclosure Document, state addenda are required to be included in the FDD. Exhibit E of the FDD is specifically designated for state addenda. These addenda contain modifications to the standard Expense Reduction Analysts franchise agreement and disclosure document, tailoring them to comply with specific state laws and regulations.
For example, the FDD includes an addendum for California that addresses issues such as franchise termination, transfer, non-renewal rights, and the enforceability of covenants not to compete under California law. Similarly, the FDD includes an addendum for North Dakota, which modifies clauses related to general releases upon renewal, the enforceability of non-compete agreements, and stipulations regarding mediation, arbitration, choice of forum, and choice of law to align with North Dakota statutes.
These state-specific addenda are crucial for prospective Expense Reduction Analysts franchisees because they outline how the franchise agreement is adapted to the laws of their particular state. Franchisees must carefully review these addenda to understand their rights and obligations under the franchise agreement, as the standard terms may be altered or superseded by state law. This ensures that the franchise agreement complies with local regulations and protects the franchisee's interests within their specific jurisdiction.
By including these addenda, Expense Reduction Analysts aims to provide a transparent and legally compliant franchise offering that addresses the unique regulatory requirements of each state. Franchisees should consult with legal counsel to fully understand the implications of these state-specific modifications before signing the franchise agreement.