Does the provision regarding waiver of claims under state franchise law by a Ledgers franchisee supersede all other terms in any document?
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's 2025 Franchise Disclosure Document, a specific provision addresses the waiver of claims under state franchise law. For franchisees, any statement, questionnaire, or acknowledgment signed in connection with starting the franchise cannot waive claims under state franchise law, including claims of fraud. This also means franchisees cannot disclaim reliance on statements made by Ledgers or its representatives. This specific provision takes precedence over any other conflicting terms in any document related to the franchise agreement.
This protection is particularly relevant because franchise agreements often contain numerous clauses and acknowledgments. This clause ensures that franchisees retain their rights under state laws, regardless of other agreements they may sign. This is especially important in states with strong franchise laws designed to protect franchisees.
Several states, including California, Illinois, Indiana, Maryland, Minnesota, New York, and North Dakota, have specific addenda that further modify the franchise agreement to comply with their respective state laws. In these states, if any terms of the Disclosure Document are inconsistent with the state addenda, the terms of the state addenda will take precedence. These addenda cover various aspects, such as termination rights, non-compete covenants, and waivers, ensuring that franchisees in these states receive the full protection of their local laws.