Are there any circumstances where a statement signed by a Ledgers franchisee can waive claims under state franchise law?
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 statement, questionnaire, or acknowledgment signed by a franchisee in connection with starting the franchise relationship cannot waive claims under any applicable state franchise law. This includes claims of fraud. This provision takes precedence over any other term in any document related to the franchise. This protection is reiterated in addenda specific to Illinois, Minnesota, and New York.
For prospective Ledgers franchisees, this means that you cannot unintentionally forfeit your rights under state franchise laws by signing a document during the initial phase of your franchise. This is designed to protect franchisees from unknowingly relinquishing legal protections. The FDD specifies that this protection extends to claims of fraud in the inducement, meaning that even if you were persuaded to enter the agreement based on false information, you retain the right to pursue legal action.
However, the FDD also includes state-specific addenda that modify certain terms of the franchise agreement to comply with local laws. For example, the California addendum notes that certain provisions in the agreement, such as those related to termination upon bankruptcy or covenants not to compete, may not be enforceable under California law. Similarly, the New York addendum ensures that the non-waiver provisions of New York General Business Law remain in effect. Therefore, while Ledgers cannot require you to waive your rights, the specific rights and obligations may vary depending on the state in which you operate your franchise.
It is important for prospective franchisees to carefully review the state-specific addenda applicable to their location and to consult with an attorney to fully understand their rights and obligations under the franchise agreement and applicable state laws. While Ledgers cannot enforce waivers of state franchise law claims through franchisee statements, the specific legal landscape can differ significantly from state to state.