Does the Kidokinetics Franchise Agreement allow for statements signed by the franchisee to waive claims of fraud in the inducement under state franchise law?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, the franchise agreement does not allow franchisees to sign statements that waive claims of fraud in the inducement under state franchise law. The FDD explicitly states that no statement, questionnaire, or acknowledgment signed by a franchisee can waive such claims. This provision is designed to protect franchisees from unknowingly relinquishing their legal rights. This protection extends to disclaiming reliance on statements made by Kidokinetics or its representatives. The FDD emphasizes that this specific provision overrides any other conflicting terms within any document related to the franchise agreement. This ensures that franchisees retain their rights under applicable state franchise laws, including the right to pursue claims of fraud if they believe they were misled into entering the franchise agreement.
Several states have specific addenda that reinforce these protections or provide additional rights to franchisees. For example, the FDD includes addenda for states like Wisconsin, Rhode Island, South Dakota, and Virginia, which reiterate that no statement signed by a franchisee can waive claims of fraud in the inducement. These addenda highlight the importance of state-specific franchise laws and how they interact with the franchise agreement. In the case of Rhode Island, the Franchise Investment Act voids any provision restricting jurisdiction or requiring the application of laws from another state, further safeguarding the franchisee's rights within their own state.
For prospective Kidokinetics franchisees, this means that any document they sign during the commencement of their franchise relationship cannot be used to prevent them from pursuing legal claims related to fraud in the inducement. This provides a level of security and recourse if a franchisee believes they were deceived or misled by Kidokinetics during the franchise sales process. It is important for franchisees to carefully review all documents and understand their rights under both the franchise agreement and applicable state laws. Consulting with an attorney experienced in franchise law is advisable to ensure full comprehension of these protections and rights.