Are the Acknowledgement Statements in the Fly Fitness franchise agreement permitted by state law?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
EXHIBIT G
FLY FITNESS ACKNOWLEDGEMENT STATEMENT
Acknowledgement of the truthfulness of the statements below are an inducement for the Franchisor to enter into a Franchise Agreement (or Multi-Unit Development Agreement). Notify Franchisor immediately, prior to acknowledgment, if any statement below is incomplete or incorrect.
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee (or developer) 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 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the acknowledgement statements within the franchise agreement are generally designed to ensure franchisees understand the nature of their investment and the risks involved. However, the FDD includes specific stipulations to comply with state franchise laws, particularly concerning waivers and releases. The document states that no acknowledgement signed by a franchisee can waive claims under state franchise law or disclaim reliance on franchisor statements.
Specifically, for Minnesota franchisees, the Fly Fitness FDD includes an amendment to address Minnesota Statutes Chapter 80C, which prohibits franchisors from requiring franchisees to assent to releases except as part of voluntary dispute settlements. To comply with this, any inconsistent provisions in Sections 5.2.5 or 16.3.6 of the Franchise Agreement are deleted for Minnesota franchisees.
This indicates that Fly Fitness takes steps to ensure its franchise agreement complies with varying state laws, especially regarding franchisee rights and waivers. Prospective franchisees should carefully review Exhibit H, which lists state addenda, and consult with legal counsel to understand how these provisions affect their rights in their specific state.