Can a franchisee disclaim reliance on statements made by the franchisor or its representatives when commencing the Floyds 99 franchise relationship?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
extend**," Item 17(i), titled "Franchisee's obligations on termination/nonrenewal," and Item 17(m), titled "Conditions for franchisor approval of transfer":
However, to the extent required by applicable law, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provisions of General Business Law Sections 687.4 and 687.5 be satisfied.
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- The following language replaces the "Summary" section of Item 17(d), titled "Termination by franchisee": You may terminate the agreement on any grounds available by law.
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- The following is added to the end of the "Summary" sections of Item 17(v), titled "Choice of forum", and Item 17(w), titled "Choice of law":
The foregoing choice of law should not be considered a waiver of any right conferred upon the Franchisor or upon the Franchisee by Article 33 of the General Business Law of the State of New York.
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- Franchise Questionnaires and Acknowledgements--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.
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- Receipts--Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earlier of the first personal meeting, ten (10) business days before the execution of the franchise or other agreement, or the payment of any consideration that relates to the franchise relationship.
RIDER TO THE FLOYD'S 99 FRANCHISING, LLC DEVELOPMENT AGREEMENT FOR THE STATE OF NEW YORK
| Developer is dated, 20 | This Rider to the Development Agreement by and between Floyd's 99 Franchising, LLC and | |
|---|---|---|
| 1. | The following shall be added at the end of Section 8.2.f.: | |
| 687.5 be satisfied. | Provided however, that all rights enjoyed by the Franchisee and any causes of action arising in the Franchisee's favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provision of GBL 687.4 and | |
| 2. | Section 8.6 is deleted and the following is inserted in its place: | |
| Franchisor's obligations under this Agreement. | This Agreement is fully assignable by the Franchisor and shall inure to the benefit of any assignee or other legal successor in interest, and the Franchisor shall in such event be fully released from the same, provided no assignment shall be made except to an assignee who, in the Franchisor's good faith judgment, is willing and able to assume the | |
| 3. | The following shall be added at the end of Section 9.1: | The Developer may terminate the Agreement upon any grounds available by law. |
| 4. wrongs committed by the Franchisor. |
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the ability of a franchisee to disclaim reliance on statements made by the franchisor or its representatives is limited by state laws. Specifically, addenda for several states (New York, Virginia, Illinois, Maryland, and California) explicitly state that no agreement signed by the franchisee can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by the franchisor or their representatives. These provisions override any conflicting terms in other documents related to the franchise agreement.
This means that even if a Floyds 99 franchisee signs a document suggesting they did not rely on the franchisor's statements, they may still have legal recourse if those statements were fraudulent or misleading, particularly concerning state franchise laws. This protection is especially relevant in states like California, where the addendum specifically addresses disclaimers, questionnaires, or statements that could be interpreted as waiving claims of fraud or reliance on the franchisor's representations.
For a prospective Floyds 99 franchisee, this information is crucial because it clarifies their rights and protections under state franchise laws. It prevents the franchisor from using disclaimers to avoid liability for misrepresentations made during the franchise sales process. However, franchisees should be aware that these protections are often state-specific and may not apply uniformly across all locations. It is advisable to consult with a legal professional to fully understand their rights and obligations in their specific state.