Can Punch King Fitness require a franchisee to assent to a waiver that deprives them of rights and protections?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 22: CONTRACTS]
PUNCH KING FITNESS, INC. BUSINESS ORGANIZATION FRANCHISEE: INDIVIDUAL FRANCHISEE: INDIVIDUAL FRANCHISEE:
RHODE ISLAND ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT
The following additional disclosures are required by the Rhode Island Franchise Investment Act:
A condition, stipulation, or provision requiring a franchise to waive compliance with or relieving a person of a duty or liability imposed by or a right provided by this act or a rule or order under this act is void.
A provision is a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this act.
RHODE ISLAND ADDENDUM TO FRANCHISE AGREEMENT
The Franchise Agreement to which this addendum is attached is amended as follows to comply with the Rhode Island Franchise Investment Act.
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- A general release requiring as a condition of renewal, assignment, or transfer shall not apply to any claim or liability arising under the Rhode Island Franchise Investment Act.
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- Any provision in the Franchise Agreement that requires the application of the laws of another state or designates jurisdiction or venue in a forum outside the State of Rhode Island is void with respect to a claim otherwise enforceable under the Rhode Island Franchise Investment Act.
FRANCHISOR: PUNCH KING FITNESS, INC. Its: Its:
VIRGINIA ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT
The following statements are added to Item 17.h.
Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the development agreement do not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
WASHINGTON ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to the 2024 Punch King Fitness Franchise Disclosure Document, the enforceability of a franchisee waiving their rights and protections depends on the specific state laws. For example, the Rhode Island Addendum explicitly states that any condition requiring a franchisee to waive compliance or relieve a person of a duty or liability imposed by the Rhode Island Franchise Investment Act is void. Similarly, a provision restricting jurisdiction or venue to a forum outside of Rhode Island or requiring the application of another state's laws is also void concerning claims enforceable under that Act.
In Virginia, the FDD includes a statement that under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. The addendum clarifies that if any grounds for default or termination stated in the agreement do not constitute "reasonable cause" as defined by Virginia law, that provision may not be enforceable.
These addenda suggest that while Punch King Fitness may include certain waiver provisions in its franchise agreement, the enforceability of such provisions is subject to state-specific franchise laws. A prospective franchisee should carefully review the addenda applicable to their state and consult with legal counsel to understand the extent to which they may be waiving rights or protections under the franchise agreement.