Can a Ledgers franchisee disclaim reliance on statements made by the franchisor in connection with the franchise relationship?
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.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 Ledgers Franchise Disclosure Document, a franchisee cannot disclaim reliance on statements made by Ledgers or its representatives regarding the franchise relationship. This protection extends to claims under applicable state franchise laws, including instances of fraud in the inducement. This means that any statement, questionnaire, or acknowledgment signed by the franchisee cannot waive their right to claim they relied on statements made by Ledgers. This provision takes precedence over any conflicting terms in any document related to the franchise agreement.
This non-disclaimer clause is particularly relevant in states with franchise-specific laws, such as California, New York, Minnesota, and Washington, where additional state addenda further protect franchisees' rights. For example, in New York, the rights and causes of action arising from Article 33 of the General Business Law remain in force, ensuring the non-waiver provisions of General Business Law Sections 687(4) and 687(5) are satisfied. Similarly, Washington law voids any provisions that would waive liability or restrict communication with regulators.
For prospective Ledgers franchisees, this is a significant protection. It ensures that they can hold Ledgers accountable for representations made during the franchise sales process. This prevents Ledgers from using fine print or standardized forms to avoid responsibility for misleading or inaccurate statements. Franchisees should still conduct thorough due diligence and seek legal counsel to fully understand their rights and obligations, but this clause provides an additional layer of security.
However, it's important to note that these protections may vary by state. Some states, like those listed in Exhibit A of the FDD (Michigan, California, Illinois, Indiana, Maryland, Minnesota, New York, Rhode Island, Virginia, or Wisconsin), have specific addenda that may supersede certain portions of the franchise agreement to the extent required by applicable state law. Therefore, franchisees should carefully review the state-specific addenda to understand the full scope of their rights in their particular jurisdiction.