Many franchisors elect to include disclaimers in their Franchise Disclosure Documents (FDD) and Franchise Agreements relating to certain representations that may have been made (or not made) during the franchise sales process. These disclaimers are typically in the form of a questionnaire that consist of a series of questions asking a prospective franchisee to check "yes" or "no" to questions relating to the franchise sales process. For example, the "prospective franchisee has read and understands the FDD and all attachments to the FDD, including the Franchise Agreement"; "Franchisor has not made any representation, including financial performance representation, outside of or different from the FDD and its attachments"; and similar questions. On September 20, 2022, the North American Securities Administrators Association, Inc. (NASAA) released a Statement of Policy Regarding the Use of Franchise Questionnaires and Acknowledgments.

Effective, January 1, 2023, NASAA's Statement of Policy provides for certain policies regarding the use of these questionnaires in FDDs and Franchise Agreements. First, if a franchisor chooses to ask prospective franchisees to sign a questionnaire at the end of the sales process, that questionnaire needs to be referenced in Item 22 of the FDD and attached as an exhibit to the FDD. Moreover, if the franchisor asks a prospective franchisee to verbally respond to a questionnaire on video, a written script must be referenced in Item 22 and attached to the FDD as an exhibit.

Second, the policy prohibits the use of any statements or questions that would cause a prospective franchisee to surrender (or believe they have surrendered) any rights under federal or state law or that would shift a franchisor's disclosure duties under appliable law. The policy also includes a list of prohibited statements or questions to be included in the questionnaire.

Third, the franchisor must include in its FDD and franchise agreement a specific statement that the questionnaire or any other statement or acknowledgment signed or agreed to by the prospective franchisee shall not have the effect of waiving any claims under applicable state franchise laws or disclaiming any reliance on any statement made by the franchisor, franchise seller, or other person acting on behalf of the franchisor.

The full Statement of Policy can be found here.

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