Does the Ledgers franchise agreement allow the franchisor to disclaim representations made to the franchisee?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
10.8. Release of Prior Claims
By executing this Agreement, the Franchisee, on behalf of yourselves and your heirs, legal representatives, successors and assigns, and each assignee of this Agreement, forever releases and discharges us, our past and present employees, agents, members, officers, and directors, including any of our parent, subsidiary and affiliated entities, their respective past and present employees, agents, members, officers, and directors, from any and all Claims arising prior to the date of this Agreement. However, this release does not apply to any Claim you may have arising from representations in our Franchise Disclosure Document.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the franchise agreement does not allow the franchisor to disclaim representations made to the franchisee. Specifically, the franchise agreement states that no statement, questionnaire, or acknowledgment signed by a franchisee can disclaim reliance on any statement made by the franchisor or anyone acting on their behalf. This provision overrides any other conflicting terms in any document related to the franchise agreement.
This means that Ledgers franchisees are protected from waivers that would prevent them from claiming they relied on representations made by the franchisor during the franchise sales process. This protection extends to claims of fraud in the inducement under applicable state franchise laws. The FDD emphasizes that this clause supersedes any other term within any document executed in connection with the franchise, reinforcing its importance.
However, it's important to note that this protection may have limitations depending on the franchisee's location. For example, the addendum specifies that certain provisions may be superseded by state law in states like Michigan, California, Illinois, Indiana, Maryland, Minnesota, New York, Rhode Island, Virginia, or Wisconsin. Additionally, Washington franchisees have a separate addendum that applies to them, and the standard acknowledgment is inapplicable in their case. Therefore, franchisees should carefully review the state addendum applicable to their location to understand any specific modifications or limitations.
Furthermore, while Ledgers cannot disclaim representations made in the Franchise Disclosure Document, the franchisee, by executing the agreement, releases Ledgers from any and all claims arising prior to the date of the agreement. However, this release does not apply to any claim the franchisee may have arising from representations in the Franchise Disclosure Document. This ensures that franchisees retain their rights concerning the information provided in the FDD, while also agreeing to release the franchisor from other prior claims.