What right does a Spray Net franchisee waive regarding alleged fraud, misrepresentation, or deceit by the franchisor?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee hereby waives the right to obtain any remedy based on alleged fraud, misrepresentation, or deceit by Franchisor, including, without limitation, rescission of this Agreement, in any mediation, judicial, or other adjudicatory proceeding arising hereunder, except upon a ground expressly provided in this Agreement, or under any right expressly granted by any applicable statute expressly regulating the sale of franchises, or any regulation or rules promulgated thereunder.
- J. Waiver of Punitive Damages.
Franchisee hereby waives to the fullest extent permitted by law, any right to or claim for any punitive, exemplary, incidental, indirect, special or
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to the 2025 Spray Net Franchise Disclosure Document, a franchisee waives the right to seek remedies like rescission of the agreement in mediation, judicial, or other adjudicatory proceedings if they allege fraud, misrepresentation, or deceit by Spray Net. This waiver applies unless the claim is based on grounds expressly provided in the Franchise Agreement or under rights granted by statutes regulating franchise sales.
This waiver means that a Spray Net franchisee's ability to pursue legal recourse against the franchisor for fraud, misrepresentation, or deceit is significantly limited. The franchisee can only seek remedies if the basis for the claim is explicitly outlined in the franchise agreement or protected by franchise-specific laws. This could restrict the franchisee's options if they believe they were misled during the franchise sales process.
Furthermore, the franchisee also waives the right to claim punitive, exemplary, incidental, indirect, special, or consequential damages, including lost profits, against Spray Net. The franchisee's recovery in a dispute is limited to actual damages. However, Spray Net retains the right to claim expectation or consequential damages, including lost future royalties, if the agreement is terminated due to the franchisee's default.
It is important to note that addenda for certain states like Maryland and Illinois include provisions that aim to protect franchisees from waiving rights granted under their state's franchise laws, particularly regarding fraud in the inducement. These addenda generally state that no agreement signed by the franchisee can waive claims under applicable state franchise law or disclaim reliance on statements made by the franchisor. Franchisees should carefully review any state-specific addenda to understand their rights in their particular jurisdiction.