For a Kidokinetics franchise, can a franchisee disclaim reliance on statements made by the franchisor or their representatives through a signed statement or acknowledgment?

According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee cannot disclaim reliance on statements made by Kidokinetics or its representatives through a signed statement or acknowledgment. The FDD states that no statement, questionnaire, or acknowledgment signed by a franchisee in connection with starting the franchise can waive claims under any applicable state franchise law, including fraud in the inducement, or disclaim reliance on any statement made by Kidokinetics, franchise sellers, or anyone acting on Kidokinetics's behalf. This rule overrides any other conflicting terms in any document related to the franchise agreement.

This provision protects franchisees by ensuring they can hold Kidokinetics accountable for representations made during the franchise sales process. It prevents Kidokinetics from using waivers or acknowledgments to shield themselves from liability for misleading or false statements. This is particularly important in franchising, where franchisees often rely on the franchisor's expertise and projections when making their investment decision.

Several states, including Wisconsin, Hawaii, Ohio, Rhode Island, South Dakota, Virginia, and Washington, have specific addenda or laws that further protect franchisees. These state-specific regulations often address issues such as conflicts of law, termination and renewal rights, and restrictions on waiving rights under franchise laws. For example, Virginia law prohibits Kidokinetics from using undue influence to induce a franchisee to surrender their rights, and California law makes certain liquidated damages clauses unenforceable. These state-specific provisions reinforce the general principle that franchisees cannot be forced to disclaim reliance on the franchisor's statements.

Prospective Kidokinetics franchisees should be aware of these protections and understand that they cannot waive their right to hold Kidokinetics accountable for its representations. They should carefully review the FDD and any applicable state addenda to understand their rights and protections under the franchise agreement and relevant laws. It is also advisable to seek legal counsel to ensure a full understanding of the franchise agreement and any potential risks or liabilities.