Does the Gokhale Method Franchise Agreement allow a franchisee to disclaim reliance on any statement made by the franchisor or their representatives?
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 does not allow a franchisee to disclaim reliance on statements made by the franchisor or their representatives. Specifically, the FDD states that no statement, questionnaire, or acknowledgment signed by a franchisee can be interpreted as disclaiming reliance on any statement or information provided by the franchisor, broker, or anyone acting on the franchisor's behalf if that statement was a material inducement to the franchisee's investment. This provision takes precedence over any other conflicting terms in any document related to the franchise agreement.
This means that Gokhale Method franchisees retain the right to claim they relied on information provided by the franchisor during the franchise sales process, even if they sign documents that appear to waive this right. This protection extends to claims of fraud in the inducement, whether based on common law or statutory provisions. The FDD emphasizes that this protection supersedes any other terms in any document executed in connection with the franchise.
Furthermore, California's Franchise Investment Law reinforces this protection by stating that any provision requiring a franchisee to waive specific provisions of the law is against public policy and therefore void and unenforceable. The law explicitly prohibits Gokhale Method from disclaiming or denying representations made to the franchisee, the franchisee's ability to rely on those representations, or any violations of the law. This ensures that franchisees are not pressured into relinquishing their legal rights or acknowledging the accuracy of potentially misleading information.