What is the effect of the superseding provision in the Gokhale Method franchise agreement regarding fraud claims?
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, the franchise agreement contains provisions that protect a franchisee's right to pursue fraud claims. Specifically, any disclaimer, questionnaire, clause, or statement signed by a franchisee cannot be interpreted as a waiver of fraud claims related to being induced into the franchise. This protection applies to both common law and statutory fraud claims.
Furthermore, franchisees retain the right to rely on statements or information provided by Gokhale Method, its brokers, or anyone acting on its behalf, if that information was a material factor in the franchisee's decision to invest. This means Gokhale Method cannot use any document to argue that a franchisee waived their right to claim they were fraudulently induced into signing the agreement based on misleading information.
These provisions are designed to supersede any other conflicting terms within any document executed in connection with the franchise agreement. This ensures that the franchisee's right to bring a fraud claim remains intact, regardless of other clauses that might suggest otherwise. This protection extends to claims under applicable state franchise laws, including fraud in the inducement, and disallows disclaimers of reliance on statements made by Gokhale Method or its representatives.