16. Can a franchise agreement contain a clause that releases a franchisor from liability for any misrepresentations to the franchisee?
No. A franchise agreement must not contain or require a franchisee to sign:
a general release of the franchisor‘s liability towards the franchisee, or
a waiver of any verbal or written representation made by the franchisor.
For example, if a franchisor makes a claim about the potential earnings of a franchise, it must be able to substantiate that claim. It cannot avoid liability simply by including a clause in the franchise agreement that the franchisee has not relied on any of the franchisor’s claims.