Does the Ledgers franchise agreement require franchisees to waive their right to participate in a class action against Ledgers?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
--------| | Schedule 2 | Automatic Bank Draft Authorization | | Schedule 3 | Telephone Number Assignment | | Schedule 4 | Lease Rider | | Schedule 5 | Release | | Schedule 6 | State Addenda to the Franchise Agreement |
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.
EXHIBIT A
STATE ADDENDA TO THE DISCLOSURE DOCUMENT AND FRANCHISE AGREEMENT
The following modifications are to Loyalty Business Services LLC d/b/a Ledgers Franchise Disclosure Document and may supersede, to the extent then required by valid applicable state law, certain portions of the Franchise Agreement dated The provisions of this State Law Addendum to Franchise Disclosure Document and Franchise Agreement ("State Addendum") apply only to those persons residing or operating a Ledgers Franchised Business in the following states: Michigan, California, Illinois, Indiana, Maryland, Minnesota, New York, Rhode Island, Virginia, or Wisconsin.
CALIFORNIA
As to franchises governed by the California Franchise Investment Law, if any of the terms of the Disclosure Document are inconsistent with the terms below, the terms below control.
California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning termination, transfer or non-renewal of a franchise. If the Franchise Agreement or Agreement contains provisions that are inconsistent with the law, the law will control.
The Franchise Agreement provide for termination upon bankruptcy. This provision may not be enforceable under Federal Bankruptcy Law (11 U.S.C.A. Sec. 101 et seq.).
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
The 2025 Ledgers Franchise Disclosure Document does not explicitly state whether franchisees are required to waive their right to participate in a class action against Ledgers. However, the document does state that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Ledgers or its representatives. This provision supersedes any other term in documents related to the franchise agreement.
Furthermore, the FDD includes state-specific addenda that modify the franchise agreement to comply with local laws. For example, for franchises governed by California law, if any terms of the disclosure document are inconsistent with California Business and Professions Code Sections 20000 through 20043, the law will control. Similarly, for franchises in Washington, provisions that unreasonably restrict or limit the statute of limitations period for claims under the Washington Franchise Investment Protection Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
Prospective franchisees should carefully review the franchise agreement and any state-specific addenda with legal counsel to understand their rights and obligations, including whether any provisions could be interpreted as a waiver of the right to participate in a class action. It is important to understand how state laws may impact the enforceability of certain provisions in the franchise agreement.