Under what conditions does the State Addendum apply to a Ledgers franchise?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the State Addendum applies specifically to individuals who either reside in or operate a Ledgers franchised business within certain states. These states are Michigan, California, Illinois, Indiana, Maryland, Minnesota, New York, Rhode Island, Virginia, or Wisconsin.
For franchisees in California, the addendum clarifies that if any terms within the Disclosure Document are inconsistent with the terms outlined in California Business and Professions Code Sections 20000 through 20043, the state law will take precedence. The addendum also addresses specific clauses within the Franchise Agreement, such as those concerning termination upon bankruptcy and covenants not to compete, noting that these may not be enforceable under California law. Furthermore, it references Section 31125 of the California Corporation Code, which mandates that Ledgers provide a disclosure document before any material modification to an existing franchise agreement.
For Washington franchisees, a Washington Addendum applies instead of the Acknowledgment. The Washington Addendum is an integral part of the Franchise Disclosure Document, the franchise agreement, and all related agreements. It applies if the offer to sell a franchise is accepted in Washington, if the purchaser of the franchise is a resident of Washington, and/or if the franchised business is to be located or operated, wholly or partly, in Washington. In case of conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.