Does Mrcool allow franchisees to disclaim reliance on statements made by the franchisor or its representatives through signed questionnaires or acknowledgements?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
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- No statement, questionnaire or acknowledgement 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.
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- Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the New York General Business Law, are met independently without reference to this amendment.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the franchise agreement includes amendments that address the franchisee's ability to disclaim reliance on statements made by the franchisor. Specifically, these amendments, applicable in states like California, Hawaii, New York, Virginia, and Washington, ensure that no signed statement, questionnaire, or acknowledgment can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Mrcool or its representatives. This provision takes precedence over any conflicting terms in the franchise agreement.
For a prospective Mrcool franchisee, this means that any documents signed during the commencement of the franchise relationship cannot be used to prevent them from pursuing claims against the franchisor based on misrepresentations or fraud. This protection is particularly important because it prevents Mrcool from using standardized forms to circumvent state franchise laws designed to protect franchisees. The franchisee retains the right to rely on statements made by Mrcool during the franchise sales process.
However, it's important to note that these protections are often tied to specific state laws. For example, the New York amendment specifies that its provisions are effective only to the extent that the jurisdictional requirements of the New York General Business Law are met. Similarly, the Hawaii amendment indicates that the Hawaii Franchise Investment Law will control if there are inconsistencies. Therefore, the extent of these protections can vary based on the franchisee's location and the applicable state laws.
In summary, Mrcool's franchise agreement, as amended, aims to prevent franchisees from unintentionally waiving their rights to pursue claims against the franchisor based on misrepresentations. This is a beneficial provision for franchisees, as it ensures they can rely on the information provided by Mrcool during the franchise sales process and are not barred from seeking legal recourse if that information proves to be false or misleading. Franchisees should still consult with legal counsel to fully understand their rights and protections under the franchise agreement and applicable state laws.