What is the effect of a franchisee signing a statement that disclaims reliance on statements made by the franchisor for a Gokhale Method franchise?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
This provision supersedes any other or inconsistent term of any document executed in connection with the franchise
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 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, any disclaimer, questionnaire, clause, or statement signed by a franchisee regarding the franchise relationship cannot be interpreted as a waiver of fraud claims. This includes both common law and statutory fraud in the inducement.
Specifically, such documents cannot disclaim reliance on the right to depend upon any statement or information provided by Gokhale Method, its brokers, or anyone acting on its behalf, if that statement was a material inducement for the franchisee's investment. This provision is designed to protect franchisees from being bound by clauses that might prevent them from pursuing legal action if they believe they were misled into investing in the franchise.
This protection extends to claims under applicable state franchise laws, including fraud in the inducement. The FDD explicitly states that this provision supersedes any other conflicting terms in any document executed in connection with the franchise. This means that even if a franchisee signs a document that appears to disclaim reliance on the franchisor's statements, that disclaimer will not be legally effective to prevent a claim of fraud.