Can a Ledgers franchisee waive claims under state franchise law through a signed statement or acknowledgment?
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 Ledgers' 2025 Franchise Disclosure Document, a franchisee cannot waive claims under state franchise law through a signed statement or acknowledgment. This protection extends to claims of fraud in the inducement and disclaiming reliance on statements made by Ledgers or its representatives. This provision takes precedence over any conflicting terms in the franchise agreement. This non-waiver provision is in place to protect franchisees from inadvertently relinquishing their legal rights during the initial stages of the franchise relationship.
Specifically, the FDD includes addenda for certain states like California, Illinois, and North Dakota, which reinforce franchisee rights and modify certain terms of the franchise agreement to comply with state laws. For example, Illinois law explicitly voids any provision that requires a franchisee to waive compliance with the Illinois Franchise Disclosure Act or any other Illinois law. Similarly, North Dakota law states that any requirement for a franchisee to sign a general release upon renewal of the franchise agreement does not apply to franchise agreements covered under North Dakota law.
For franchisees in Minnesota, the FDD states that Minnesota Rules prohibit Ledgers from requiring a franchisee to assent to a general release. These state-specific addenda highlight the importance of understanding the specific legal protections available to franchisees based on their location. The inclusion of these state addenda demonstrates Ledgers' awareness of and compliance with varying state franchise laws, further safeguarding franchisee rights.
In New York, the nonwaiver provisions of General Business Law Sections 687(4) and 687(5) remain in force, ensuring that franchisees retain all rights and causes of action arising from Article 33 of the General Business Law of the State of New York. This comprehensive approach to franchisee protection underscores Ledgers' commitment to adhering to state franchise laws and ensuring that franchisees are not compelled to waive their legal rights through signed statements or acknowledgments.