Is Gokhale Method allowed to disclaim representations made to franchisees in California?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
d material modification of an existing franchise.
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- California's Franchise Investment Law (Corporations Code sections 31512 and 31512.1) states that any provision of a franchise agreement or related document requiring the franchisee to waive specific provisions of the law is contrary to public policy and is void and unenforceable. The law also prohibits a franchisor from disclaiming or denying (i) representations it, its employees, or its agents make to you, (ii) your ability to rely on any representations it makes to you, or (iii) any violations of the law.
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- No person identified in Item 2 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 such persons from membership in such association or exchange.
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Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, California's Franchise Investment Law protects franchisees from franchisors disclaiming or denying representations made to them. Specifically, Gokhale Method is prohibited from disclaiming or denying representations made to potential franchisees by the company, its employees, or agents. Additionally, Gokhale Method cannot deny a franchisee's ability to rely on these representations, nor can they disclaim liability for any violations of the law.
This protection extends to preventing Gokhale Method from requiring franchisees to waive specific provisions of the law, as any such waiver is considered contrary to public policy and is void and unenforceable. This ensures that franchisees in California can rely on the information provided by Gokhale Method during the franchise sales process and that they have legal recourse if the information proves to be false or misleading.
Furthermore, any statement, questionnaire, or acknowledgment signed by a Gokhale Method franchisee at the start of the franchise relationship cannot waive claims under state franchise law, including claims of fraud in the inducement. Franchisees also cannot disclaim reliance on statements made by Gokhale Method, its sellers, or anyone acting on its behalf. This provision takes precedence over any conflicting terms in any document related to the franchise agreement, reinforcing the protection afforded to franchisees under California law.