Under the Ledgers Franchise Agreement, what effect does a statement signed by the franchisee have on waiving 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 the 2025 Ledgers Franchise Disclosure Document, a statement, questionnaire, or acknowledgment signed by a franchisee at the start of the franchise relationship does not waive claims under state franchise law. This includes claims of fraud. Additionally, franchisees cannot disclaim reliance on statements made by Ledgers, its franchise sellers, or anyone acting on behalf of Ledgers. This rule overrides any conflicting terms in any document related to the franchise agreement.
This provision protects franchisees by ensuring they retain their rights under state franchise laws, even if they sign documents that appear to waive those rights. This is particularly important in states with strong franchise protection laws. The FDD also includes state-specific addenda that may further modify the franchise agreement to comply with local laws. For example, the addendum for California states that California Business and Professions Code Sections 20000 through 20043 provide rights concerning termination, transfer, or non-renewal of a franchise, and that the law will control if the Franchise Agreement contains provisions inconsistent with the law.
For prospective Ledgers franchisees, this means that signing a standard franchise agreement or related documents does not automatically forfeit their legal rights under state franchise laws. They still have the ability to pursue claims against Ledgers if they believe their rights have been violated. This protection is especially relevant in states like California, Illinois, Minnesota, and New York, which have specific franchise laws designed to protect franchisees. Franchisees should always consult with an attorney to understand their rights and obligations under the franchise agreement and applicable state laws.
It is important to note that while the standard agreement cannot waive state franchise law claims, franchisees should still be aware of other provisions that could impact their rights. For example, the agreement may include clauses related to dispute resolution, termination, or renewal that could be affected by state laws. Therefore, franchisees should carefully review the entire franchise agreement and any state-specific addenda to fully understand their rights and obligations.