After entering into a Pearce Bespoke franchise agreement, is a franchisee precluded from settling claims?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM TO THE PEARCE BESPOKE FRANCHISING LLC DISCLOSURE DOCUMENT AND FRANCHISE AGREEMENT REQUIRED BY THE STATE OF MICHIGAN
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 on the right of a franchisee to join an association of franchises.
(b) A requirement that a franchisee assent to a release, assignment, novation, waiver or estoppel which deprives a franchisee of rights and protections provided in this act.
This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.
- (c) A provision that permits a franchisor to terminat
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, the franchise agreement cannot prevent a franchisee from settling claims after the agreement has been established, specifically in Michigan. The FDD includes an addendum required by the state of Michigan that addresses unfair provisions sometimes found in franchise documents. This addendum explicitly states that any requirement preventing a franchisee from settling claims after entering the franchise agreement is void and unenforceable in Michigan.
This provision protects Pearce Bespoke franchisees in Michigan by ensuring they retain the right to resolve disputes and settle claims without being bound by clauses in the franchise agreement that might restrict such actions. This is particularly important as it allows franchisees to address potential issues or disagreements that may arise during the course of their business operations.
It is important to note that this protection is specifically mandated by Michigan state law and applies to Pearce Bespoke franchises operating within Michigan. Franchisees in other states may not have the same explicit protection, so it's crucial to review the specific franchise agreement and any state-specific addenda for those locations to understand their rights regarding settling claims.