What effect does the 'No Waiver or Disclaimer of Reliance' provision have on statements signed by a Stretch Zone franchisee in connection with the franchise relationship in certain states?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 8.16 NO WAIVER OR DISCLAIMER OF RELIANCE IN CERTAIN STATES
The following provision applies only to franchisees and franchises that are subject to the state franchise registration/disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin:
No statement, questionnaire, or acknowledgement signed or agreed to by 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 Franchisor, any franchise seller, or any other person acting on behalf of Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, the 'No Waiver or Disclaimer of Reliance' provision protects franchisees in specific states from unintentionally relinquishing their rights under state franchise laws. This provision applies to franchisees and franchises subject to franchise registration/disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin.
Specifically, any statement, questionnaire, or acknowledgment signed by a Stretch Zone franchisee at the start of their franchise relationship cannot waive claims under applicable state franchise law. This includes claims related to fraud in the inducement, meaning a franchisee cannot unknowingly give up their right to sue if they were misled into signing the agreement.
Furthermore, this provision ensures that franchisees in those states cannot disclaim reliance on statements made by Stretch Zone, its franchise sellers, or anyone acting on Stretch Zone's behalf. This means that franchisees' ability to claim they relied on misrepresentations is protected. The provision explicitly states that it overrides any conflicting terms in any document related to the franchise agreement, strengthening the protection for franchisees in the listed states.
In practical terms, this clause provides an added layer of security for franchisees in states with franchise laws, ensuring that they retain their legal rights and recourse even after signing agreements or acknowledgments. It prevents Stretch Zone from using standardized paperwork to circumvent state franchise laws and protects franchisees from unknowingly waiving their rights or disclaiming reliance on information provided during the franchise sales process.