If a Spray Net franchisee's owner/principal commits fraud in the franchise application, is there an opportunity to cure?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
No statement, questionnaire, or acknowledgment 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.
Section 15 of the Franchise Agreement is hereby modified to add the following language:
The conditions under which this Agreement can be terminated or not renewed may be affected by Minnesota law, which provides Franchisee with certain termination and nonrenewal rights. Minnesota State Section 80C.14 Subd. 3-5, which require, except in certain specified cases, that Franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
Based on the 2025 Spray Net Franchise Disclosure Document, the franchise agreements for franchisees in Minnesota and Virginia include specific stipulations that address the franchisee's rights regarding claims, including fraud. Specifically, these addenda state that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under applicable state franchise law, including fraud in the inducement. This suggests that franchisees in these states retain their rights to pursue claims of fraud, regardless of any agreements to the contrary. This provision supersedes any other term of any document executed in connection with the franchise.
For Minnesota franchisees, Minnesota Statute 80C.14 Subd. 3-5 requires that, except in certain specified cases, a franchisee must be given 90 days' notice of termination with 60 days to cure, and 180 days' notice for non-renewal of the franchise agreement. However, the document does not explicitly state whether fraud in the franchise application is one of the cases in which the right to cure is excluded.
For Maryland franchisees, the Maryland Addendum specifies that all representations requiring prospective franchisees to assent to a release, estoppel, or waiver of liability do not act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. The addendum also states that any provision of the agreement which provides for a period of limitations for causes of action shall not apply to causes of action under the Maryland Franchise Law, Business Regulation Article, §14-227, Annotated Code of Maryland, and that Franchisee must bring an action under such law within three years after the grant of the franchise. The FDD excerpts do not specify whether a franchisee would have an opportunity to cure if the owner/principal commits fraud in the franchise application.
Therefore, while the FDD excerpts do not provide a definitive answer on whether a Spray Net franchisee has an opportunity to cure in the event of fraud in the franchise application, it is important for prospective franchisees to consult with legal counsel to understand their rights and obligations under the franchise agreement and applicable state laws.