What is the effect of the added language to the Ledgers Franchise Agreement and Franchisee Questionnaire regarding releases, estoppels, or waivers?

According to Ledgers' 2025 Franchise Disclosure Document, specific language has been added to the Franchise Agreement and Franchisee Questionnaire to protect franchisees in certain states, particularly Maryland, from unintentionally waiving their rights under franchise laws. This added language clarifies that any representations requiring prospective franchisees to agree to a release, estoppel, or waiver of liability are not intended to, and will not, act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. This ensures that franchisees in Maryland retain their legal rights and protections under state franchise law, regardless of any general waivers or releases they may sign during the franchise commencement process.

This modification is significant because it prevents Ledgers from inadvertently circumventing Maryland's franchise laws through standard agreement clauses. Franchise laws are designed to protect franchisees from unfair practices by franchisors, and this provision ensures that franchisees in Maryland can still pursue claims under these laws if necessary. The FDD also states that similar protections may exist in other states, such as California and New York, where state laws may supersede certain provisions of the franchise agreement to protect franchisee rights regarding termination, transfer, non-renewal, and other key aspects of the franchise relationship.

For a prospective Ledgers franchisee, this means that if they are located in Maryland, they cannot unintentionally waive their rights under the Maryland Franchise Registration and Disclosure Law through standard releases or waivers in the Franchise Agreement or Questionnaire. This provides an added layer of security and ensures that they can pursue legal remedies if Ledgers violates the state's franchise laws. Franchisees should still carefully review all documents and consult with legal counsel to fully understand their rights and obligations, but this specific amendment offers additional protection.

It is important to note that these protections may vary by state, and franchisees in other states should be aware of similar provisions or addenda that apply to their specific circumstances. For example, California law voids waivers of rights under the Franchise Investment Law and Franchise Relations Act. Therefore, prospective franchisees should pay close attention to any state-specific addenda and seek legal advice to understand how these provisions affect their rights and obligations under the Ledgers franchise agreement.