Will Itan require franchisees to prospectively waive liability imposed by the Rhode Island Franchise Law?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the requirements of the Rhode Island Franchise Investment Act (the "Rhode Island Franchise Law"), the Disclosure Document, Franchise Agreement and Supplemental Agreements are amended as follows:
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- We will not require that you prospectively assent to a waiver, condition, stipulation, or provision that purports to relieve any person from liability imposed by the Rhode Island Franchise Law. This provision does not apply to the settlement of disputes, claims, or civil lawsuits brought under the Rhode Island Franchise Law.
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- Section 19-28.1-14 of the Rhode Island Franchise Law provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act." If a claim is enforceable under the Rhode Island Franchise Law, we will not restrict jurisdiction or venue to a forum outside the State of Rhode Island or require the application of the laws of another state.
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- We will not prohibit you from joining a trade association or association of franchisees. We will not retaliate against you for engaging in these activities.
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- Any provision in the Franchise Agreement that limits the time period in which you may assert a legal claim against us under the Rhode Island Franchise Law is amended to provide for a four (4) year statute of limitations for purposes of bringing a claim arising under the Rhode Island Franchise Law. Notwithstanding the foregoing, if a rescission offer has been approved by the Rhode Island director of business registration, then the statute of limitations is ninety (90) days after your receipt of the rescission offer.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan will not require franchisees to prospectively waive liability imposed by the Rhode Island Franchise Law. The FDD states that Itan will not require franchisees to agree to any waiver, condition, stipulation, or provision that would relieve any person from liability under the Rhode Island Franchise Law. However, this does not apply to the settlement of disputes, claims, or civil lawsuits brought under the Rhode Island Franchise Law.
Furthermore, the FDD acknowledges that any provision restricting jurisdiction or venue to a forum outside of Rhode Island, or requiring the application of laws from another state, is void with respect to claims enforceable under the Rhode Island Franchise Law. Itan also confirms that franchisees will not be prohibited from joining a trade association or association of franchisees, nor will they face retaliation for engaging in these activities.
Finally, any provision in the Franchise Agreement that limits the time period for asserting a legal claim against Itan under the Rhode Island Franchise Law is amended to provide for a four-year statute of limitations for claims arising under the Rhode Island Franchise Law. An exception exists if a rescission offer has been approved by the Rhode Island director of business registration, in which case the statute of limitations is 90 days after receipt of the rescission offer. These stipulations provide additional protections for franchisees operating in Rhode Island.