Is the acknowledgement section in the Pearce Bespoke Franchise Agreement valid in California and Washington?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT J
FRANCHISEE ACKOWLEDGMENT STATEMENT
*VOID IN THE STATES OF CALIFORNIA AND WASHINGTON
Acknowledgement of the truthfulness of the statements below are an inducement for the Franchisor to enter into a Franchise Agreement. Notify Franchisor immediately, prior to acknowledgment, if any statement below is incomplete or incorrect.
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee (or developer) 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.
- Franchisee has conducted an independent investigation of all aspects relating to the financial, operational, and other aspects of the business of operating the Franchised Business. Franchisee further acknowledges that, except as may be set forth in Franchisor's Disclosure Document, no representations of performance (financial or otherwise) for the Franchised Business provided for in this Agreement has been made to Franchisee by Franchisor and Franchisee and Franchisee hereby waives any claim against Franchisor for any business failure Franchisee may experience as a franchisee under this Agreement.
Initial
- Franchisee has conducted an independent investigation of the business contemplated by this Agreement and understands and acknowledges that the business contemplated by this Agreement involves business risks making the success of the venture largely dependent upon the business abilities and participation of Franchisee and its efforts as an independent business operation.
Initial
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the standard franchisee acknowledgment statement included in the franchise agreement is explicitly void in California and Washington. This means that any attempt to use this standard acknowledgment to waive claims or disclaim reliance on franchisor statements would be unenforceable in those states. This is due to specific franchise laws in California and Washington designed to protect franchisees.
This acknowledgement typically includes statements where the franchisee confirms they conducted their own investigation, didn't rely on franchisor representations (outside the FDD), and accept business risks. However, because it is void in California and Washington, Pearce Bespoke franchisees in those states retain their rights to pursue claims under state franchise laws, including claims of fraud in the inducement, and can demonstrate reliance on statements made by the franchisor.
For a prospective Pearce Bespoke franchisee in California or Washington, this is a significant protection. It ensures that they cannot inadvertently waive their legal rights through a standard acknowledgment form. It allows them to hold the franchisor accountable for any misrepresentations or omissions made during the franchise sales process. Franchisees should still conduct thorough due diligence, but this provision provides an additional layer of security.
Pearce Bespoke franchisees should consult with a legal professional to fully understand their rights and obligations under the franchise agreement and applicable state laws. This is especially important in California and Washington, where specific franchise laws provide additional protections that are not waivable through standard acknowledgment forms.