Under what circumstances does the State-Specific Addendum supersede portions of the Ledgers Franchise Agreement and Franchise Disclosure Document?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
son acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
EXHIBIT A
STATE ADDENDA TO THE DISCLOSURE DOCUMENT AND FRANCHISE AGREEMENT
The following modifications are to Loyalty Business Services LLC d/b/a Ledgers Franchise Disclosure Document and may supersede, to the extent then required by valid applicable state law, certain portions of the Franchise Agreement dated The provisions of this State Law Addendum to Franchise Disclosure Document and Franchise Agreement ("State Addendum") apply 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. 79a et seq., suspending or expelling such persons from membership in such association or exchange.
Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
The Franchise Agreement require application of the laws of Virginia. This provision may not be enforceable under California law.
You must sign a general release if you renew or transfer your franchise. California Corporation Code 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code 31000 through 31516). Business and Professions Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043).
THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.
The Franchise Agreement contains a liquidated damages clause. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
Our website is located at www.ledgerspros.com.
OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION at www.dfpi.ca.gov.
The highest interest rate allowed by law in California is ten percent (10%) annually.
Initial Fee Deferral:
Item 5 of the FDD and Section 2.1 of the Franchise Agreement is modified with the addition of the following language:
"The Department of Financial Protection and Innovation requires that the franchisor defer the collection of all initial fees from California franchisees until the franchisor has completed all its pre-opening obligations and franchisee is open for business."
Franchisees must sign a personal guaranty, making you and your spouse individually liable for your financial obligations under the agreement if you are married. The guaranty will place your and your spouse's marital and personal assets at risk, perhaps including your house, if your franchise fails.
Franchise Investment Law (Corporations Code sections 31512 and 31512.1) states that any provision of a franchise agreement or related document requiring the franchisee to waive specific provisions of the law is contrary to public policy and is void and unenforceable. The law also prohibits a franchisor from disclaiming or denying (i) representations it, its employees, or its agents make to you, (ii) your ability to rely on any representations it makes to you, or (iii) any violations of the law.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the State Addenda to the Disclosure Document and Franchise Agreement may supersede certain portions of the Franchise Agreement to the extent required by valid applicable state law. These State Law Addenda apply to individuals residing or operating a Ledgers franchise in Michigan, California, Illinois, Indiana, Maryland, Minnesota, New York, Rhode Island, Virginia, or Wisconsin.
For instance, in California, if any terms of the Disclosure Document are inconsistent with specific terms outlined in the California Franchise Investment Law (Sections 20000 through 20043 of the Business and Professions Code), the terms of the law will take precedence. This specifically concerns rights related to termination, transfer, or non-renewal of a franchise. Similarly, certain provisions in the Franchise Agreement, such as those allowing termination upon bankruptcy or covenants not to compete extending beyond the agreement's termination, may not be enforceable under California law.
In Illinois, if any terms of the Disclosure Document or Franchise Agreement are inconsistent with the Illinois Franchise Disclosure Act, the terms of the Act will control. Illinois law governs the Franchise Agreement, and any provision designating jurisdiction and venue outside of Illinois is void, although arbitration may occur outside the state. Furthermore, the conditions for termination and rights upon nonrenewal are affected by Sections 19 and 20 of the Illinois Franchise Disclosure Act, and any attempt to waive compliance with Illinois law is void. The collection of initial fees from Illinois franchisees is deferred until Ledgers has completed all pre-opening obligations and the franchisee is open for business.
For Washington franchisees, the Washington Addendum forms an integral part of and modifies the Franchise Disclosure Document, the franchise agreement, and all related agreements. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act will prevail. RCW 19.100.180 may supersede provisions in the franchise agreement or related agreements concerning the franchisee's relationship with Ledgers, including in the areas of termination and renewal. In Wisconsin, the Wisconsin Franchise Investment Law may supersede the Franchise Agreement in areas of termination and renewal, and the Franchise Agreement is amended to expressly permit a franchisee to file a civil lawsuit in Wisconsin for claims arising under the Wisconsin Franchise Investment Law.