Specifically in Rhode Island, does the Kidokinetics franchise agreement allow a franchisee to disclaim reliance on statements made by the franchisor?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
RHODE ISLAND
§ 19-28.1-14 of the Rhode Island Franchise Investment Act 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." The FDD, the Franchise Agreement, and the Supplemental Agreements are amended accordingly
to the extent required by law.
The above language has been included in this FDD as a condition to registration. The Franchisor and the Franchisee do not agree with the above language and believe that each of the provisions of the Franchise Agreement and the Supplemental Agreements, including all choice of law provisions, are fully enforceable. The Franchisor and the Franchisee intend to fully enforce all of the provisions of the Franchise Agreement, the Supplemental Agreements, and all other documents signed by them, including, but not limited to, all venue, choice-of-law, arbitration provisions and other dispute avoidance and resolution provisions and to rely on federal pre-emption under the Federal Arbitration Act.
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 Kidokinetics' 2024 Franchise Disclosure Document, Rhode Island franchise agreements do not allow a franchisee to disclaim reliance on statements made by the franchisor. Specifically, any statement, questionnaire, or acknowledgment signed by a Kidokinetics franchisee in Rhode Island cannot waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by the franchisor or their representatives. This provision overrides any conflicting terms in any document related to the franchise agreement.
This means that Kidokinetics franchisees in Rhode Island retain the right to pursue legal action based on misrepresentations made by the franchisor, even if they have signed documents that appear to waive this right. This protection is designed to ensure that franchisees are not unfairly disadvantaged by overly broad or misleading disclaimers. It also reinforces the importance of full and accurate disclosure by the franchisor during the franchise sales process.
For a prospective Kidokinetics franchisee in Rhode Island, this provides an added layer of security. It means that if the franchisee believes they were misled by statements made by Kidokinetics during the franchise sales process, they are not automatically barred from seeking legal recourse due to a disclaimer. This does not, however, eliminate the franchisee's responsibility to conduct their own due diligence and seek independent legal and financial advice before investing in a Kidokinetics franchise.