If the Ledgers Disclosure Document contains a material omission, what action should be taken?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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.).
The Franchise Agreement contain covenants not to compete which extend beyond the termination of the agreements. These provisions may not be enforceable under California law.
Section 31125 of the California Corporation Code requires the franchisor to provide you with a disclosure document before asking you to agree to a material modification of an existing franchise.
Neither the franchisor, any person or franchise broker in Item 2 of the Disclosure Document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 Ledgers Franchise Disclosure Document, franchisees in California have specific protections under the California Franchise Investment Law. If any terms in the Ledgers Disclosure Document are inconsistent with the terms outlined in the California Business and Professions Code Sections 20000 through 20043, then the terms of the law will take precedence. These sections of the California code address rights regarding termination, transfer, or non-renewal of a franchise agreement.
Additionally, California Corporation Code Section 31512 voids any waiver of rights under the Franchise Investment Law (California Corporations Code 31000 through 31516), and Business and Professions Code 20010 voids any waiver of rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043). This means that if a Ledgers franchisee signs a general release upon renewal or transfer, it does not waive their rights under these California laws.
Moreover, Section 31125 of the California Corporation Code mandates that Ledgers provide a disclosure document to a franchisee before requesting agreement to any material modification of an existing franchise. This ensures that franchisees are informed and have the opportunity to assess the implications of any changes to their franchise agreement. Prospective franchisees are encouraged to consult with their own legal counsel to determine how California and federal laws might apply to the franchise agreement, especially concerning provisions that restrict venue to a forum outside of California.