In Michigan, can Mrcool require a franchisee to sign a waiver that deprives them of rights and protections under the Michigan Franchise Investment Law?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
Michigan FDD Amendment
Amendments to the MRCOOL Franchise Disclosure Document
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS.
IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
- A.
A prohibition of your right to join an association of Franchisees.
- B.
A requirement that you assent to a release, assignment, novation, waiver or estoppel that deprives you of rights and protections provided in this act.
This shall not preclude you, after entering into a Franchise Agreement, from settling any and all claims.
- C.
A provision that permits us to terminate a franchise before the expiration of this term except for good cause.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the Michigan FDD Amendment explicitly addresses this issue. It states that Michigan prohibits certain unfair provisions that are sometimes included in franchise documents. Specifically, any requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel that deprives them of rights and protections provided in the Michigan Franchise Investment Law is void and cannot be enforced against the franchisee. However, the amendment clarifies that this does not prevent a franchisee from settling claims after entering into the Franchise Agreement.
This amendment is crucial for prospective Mrcool franchisees in Michigan because it ensures that certain rights and protections under the Michigan Franchise Investment Law cannot be waived at the outset of the franchise relationship. This protection is designed to prevent franchisors from using their potentially stronger bargaining position to force franchisees into agreements that strip them of legal recourse or safeguards.
In practical terms, this means that if the standard Mrcool franchise agreement contains any provisions that could be interpreted as a waiver of a franchisee's rights under Michigan law, those provisions are unenforceable in Michigan. Franchisees should pay close attention to this amendment and consult with legal counsel to fully understand their rights and protections under Michigan law, especially when reviewing the franchise agreement and related documents. This ensures that franchisees are aware of their rights and that any potentially unfair provisions are identified and understood to be unenforceable.