What should a prospective Hyper Kidz franchisee do if the Franchise Disclosure Document contains a false or misleading statement?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
BY EXECUTING THE FRANCHISE AGREEMENT, FRANCHISEE AND ANY PRINCIPAL, INDIVIDUALLY AND ON BEHALF OF FRANCHISEE'S AND SUCH PRINCIPAL'S HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS, HEREBY FOREVER RELEASE AND DISCHARGE BOOMERANG FRANCHISE, LLC, MARYLAND INDOOR PLAY, LLC, ANY OTHER AFFILIATES AND ANY PARENT COMPANY, SUBSIDIARIES, DIVISIONS, AFFILIATES, SUCCESSORS, ASSIGNS AND DESIGNEES, AND THE FOREGOING ENTITIES' DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SHAREHOLDERS, SUCCESSORS, DESIGNEES AND REPRESENTATIVES FROM ANY AND ALL CLAIMS, DEMANDS AND JUDGMENTS RELATING TO OR ARISING UNDER THE STATEMENTS, CONDUCT, CLAIMS OR ANY OTHER AGREEMENT BETWEEN THE PARTIES EXECUTED PRIOR TO THE DATE OF THE FRANCHISE AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY AND ALL CLAIMS, WHETHER PRESENTLY KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, ARISING UNDER THE FRANCHISE, SECURITIES, TAX OR ANTITRUST LAWS OF THE UNITED STATES OR OF ANY STATE OR TERRITORY THEREOF. THIS RELEASE SHALL NOT APPLY TO ANY CLAIMS ARISING FROM REPRESENTATIONS MADE BY FRANCHISOR IN FRANCHISOR'S FRANCHISE DISCLOSURE DOCUMENT RECEIVED BY FRANCHISEE.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, a franchisee retains rights regarding misrepresentations in the FDD. Specifically, the franchise agreement includes a release of claims, but this release does not extend to claims arising from representations made by Hyper Kidz in the Franchise Disclosure Document (FDD) received by the franchisee. This means that if a franchisee believes the FDD contains false or misleading information that induces them to invest in a Hyper Kidz franchise, they may have grounds to pursue a claim against the franchisor.
This protection is significant for prospective Hyper Kidz franchisees. Franchise agreements often contain broad release clauses that can limit a franchisee's ability to sue the franchisor. However, this clause explicitly preserves the franchisee's right to bring claims based on misrepresentations within the FDD. This ensures that Hyper Kidz can be held accountable for the accuracy and completeness of the information provided in the FDD, which is a crucial document for making informed investment decisions.
It is important for prospective Hyper Kidz franchisees to carefully review the FDD and any supporting documents with legal counsel before signing the franchise agreement. If they identify any statements that appear to be false or misleading, they should document these concerns and seek legal advice on their rights and options. This clause provides a degree of protection, but franchisees must still be diligent in their due diligence and prepared to take appropriate action if they believe they have been misled.