What is added to Item 17.h of the Ledgers Franchise Disclosure Document for Virginia franchisees?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
As to franchises governed by the Virginia Retail Franchising Act, if any of the terms of the Disclosure Document are inconsistent with the terms below, the terms below control.
- In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document is amended as follows:
Additional Disclosure: The following statements are added to Item 17.h.
Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, Item 17.h is amended for franchisees in Virginia. The amendment includes an additional disclosure stating that it is unlawful for Ledgers to cancel a franchise without reasonable cause, as per Section 13.1-564 of the Virginia Retail Franchising Act. Furthermore, if any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause" under Virginia law, that provision may not be enforceable.
This modification is significant for prospective Ledgers franchisees in Virginia because it provides additional protection against unwarranted franchise termination. The Virginia Retail Franchising Act ensures that Ledgers must have a legitimate and justifiable reason to cancel a franchise agreement. This clause aims to prevent arbitrary or unfair terminations, giving franchisees more security and recourse if they believe the termination is not based on reasonable cause.
This type of protection is not uniformly present across all states, as franchise laws vary considerably. The inclusion of this specific amendment for Virginia highlights the importance of understanding state-specific franchise laws. Prospective franchisees should consult with legal counsel to fully understand their rights and obligations under the franchise agreement and applicable state laws, especially concerning termination clauses.