Can Ledgers disclaim a franchisee's ability to rely on representations made by the franchisor?

According to Ledgers' 2025 Franchise Disclosure Document, Ledgers cannot disclaim a franchisee's ability to rely on statements made by the franchisor or anyone acting on their behalf. This protection extends to claims under applicable state franchise laws, including fraud in the inducement. This means that any statement, questionnaire, or acknowledgment signed by a franchisee cannot waive their right to claim reliance on the franchisor's representations. This provision takes precedence over any conflicting terms in any document related to the franchise agreement.

For prospective Ledgers franchisees, this is a crucial safeguard. It ensures that franchisees can hold Ledgers accountable for the representations made during the franchise sales process. This protection is particularly important in states with franchise laws designed to protect franchisees from misleading or fraudulent practices. The FDD specifically calls out California, Michigan, Illinois, Indiana, Maryland, Minnesota, New York, Rhode Island, Virginia, and Wisconsin as states with addenda that may supersede portions of the franchise agreement to comply with state law.

However, it's important to note that this non-disclaimer provision does not apply universally. For example, the acknowledgment is inapplicable to Washington franchisees, who are covered by a separate Washington Addendum. Additionally, representations requiring prospective franchisees to release, estop, or waive liability are not intended to act as such under Maryland Franchise Registration and Disclosure Law. These state-specific nuances highlight the importance of carefully reviewing the state addenda and understanding how local laws may modify the general terms of the franchise agreement.

Furthermore, while Ledgers cannot disclaim reliance on representations made in the Franchise Disclosure Document, the franchise agreement also includes an 'Entire Agreement' clause. This clause states that the franchise agreement and its exhibits constitute the entire agreement between the parties and supersede any prior negotiations, understandings, representations, and agreements. However, this clause explicitly clarifies that it is not intended to disclaim the representations made in the Franchise Disclosure Document. This reinforces the franchisee's ability to rely on the information provided in the FDD, but it also emphasizes the importance of ensuring that all material terms and conditions are included in the written agreement.