Does the Kidokinetics franchise agreement allow disclaiming reliance on statements made by the franchisor or its representatives through franchisee questionnaires or acknowledgements?

According to Kidokinetics's 2024 Franchise Disclosure Document, the franchise agreement does not allow franchisees to disclaim reliance on statements made by the franchisor or its representatives. Specifically, any statement, questionnaire, or acknowledgment signed by a franchisee cannot waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by the franchisor or its representatives. This provision takes precedence over any conflicting terms in other documents related to the franchise agreement. This protection is reiterated in addenda for specific states.

This means that Kidokinetics franchisees retain their legal rights to pursue claims based on misrepresentations or fraudulent statements made by the franchisor, even if they have signed documents that appear to waive those rights. This is a significant benefit for franchisees, as it provides a legal recourse if they believe they were misled during the franchise sales process. It also ensures that Kidokinetics cannot use standard form agreements to shield themselves from liability for inaccurate or misleading statements.

However, it is important to note that while the FDD states that franchisees cannot disclaim reliance on statements made by Kidokinetics, Section 20 of the Franchise Agreement is revised for California franchisees to state that the franchisee acknowledges conducting an independent investigation and that, except for representations in Item 19 of the FDD, no performance representations have been made by Kidokinetics. Additionally, Section 22.4 is revised to state that Kidokinetics disclaims any warranty or guarantee regarding the potential volume, profits, or success of the business. These revisions could potentially limit the scope of claims a franchisee can make, particularly in California, despite the general protection against disclaiming reliance.

Prospective franchisees should carefully review Item 19 of the FDD, which contains the representations Kidokinetics is willing to stand behind. They should also consult with an attorney to understand the full implications of these provisions and how they might affect their rights, especially in light of the revisions made for California franchisees. Understanding these clauses is crucial for assessing the risks and benefits of investing in a Kidokinetics franchise.