Are the representations made in the Ledgers Franchise Disclosure Document disclaimed by the Franchise Agreement?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement and all exhibits to this Agreement constitute the entire agreement between the parties and supersede any and all prior negotiations, understandings, representations, and agreements. Nothing in this or in any related agreement, however, is intended to disclaim the representations we made in the Franchise Disclosure Document that we furnished to you.
By executing this Agreement, the Franchisee, on behalf of yourselves and your heirs, legal representatives, successors and assigns, and each assignee of this Agreement, forever releases and discharges us, our past and present employees, agents, members, officers, and directors, including any of our parent, subsidiary and affiliated entities, their respective past and present employees, agents, members, officers, and directors, from any and all Claims arising prior to the date of this Agreement. However, this release does not apply to any Claim you may have arising from representations in our Franchise Disclosure 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.
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.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the Franchise Agreement does not generally disclaim the representations made in the Franchise Disclosure Document (FDD). Specifically, the agreement states that it, along with its exhibits, constitutes the entire agreement and supersedes prior negotiations, but it clarifies that nothing within the agreement is intended to disclaim the representations made in the FDD. This protects the franchisee by ensuring that Ledgers cannot later deny the claims and promises made in the disclosure document.
However, there are some caveats and state-specific addenda that modify this general rule. For example, in Illinois and New York, no statement signed by a franchisee can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Ledgers. California law states that if any terms of the disclosure document are inconsistent with the terms outlined in California Business and Professions Code Sections 20000 through 20043, the law will control.
Furthermore, the Franchise Agreement includes a clause releasing Ledgers from claims arising prior to the agreement date, but this release does not apply to claims arising from representations in the FDD. This ensures that a franchisee retains the right to pursue claims based on misrepresentations in the disclosure document, even after signing the agreement. Prospective franchisees should carefully review these provisions and any state-specific addenda with legal counsel to fully understand their rights and obligations.