Sec. 5. Procedural fairness
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/bill/115/hr/470/ih/section-5·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
It shall be unlawful for any franchisor, either directly or indirectly through another person, to— require any term or condition in a franchise agreement, or in any agreement ancillary or collateral to a franchise, which directly or indirectly violates any provision of this Act; require a franchisee to assent to any disclaimer, waiver, release, stipulation, or other provision which would purport— to relieve any person from a duty imposed by this Act, except as part of a settlement of a preexisting bona fide dispute; or to protect any person against any liability to which he would otherwise be subject under this Act by reason of willful misfeasance, bad faith, or gross negligence in the performance of duties, or by reason of reckless disregard of obligations and duties under the franchise agreement; or require a franchisee to assent to any waiver, release, stipulation, or other provision, either as part of any agreement or document relating to the operation of a franchise business, in any agreement or document relating to the termination, cancellation, forfeiture, repurchase, or resale of a franchise business, or as a condition for permitting a franchisee to leave the franchise system, which would purport to prevent the franchisee from making any oral or written statement relating to the franchise business, to the operation of the franchise system, or to the franchisee’s experience with the franchise business.
Any condition, stipulation, provision, or term of any franchise agreement, or any agreement ancillary or collateral to a franchise, which would purport to waive or restrict any right granted under this Act shall be void and unenforceable. No stipulation or provision of a franchise agreement, or of an agreement ancillary or collateral to a franchise, shall— deprive a franchisee of the application and benefits of this Act, of any other Federal law, or of the law of any State in which the franchisee is a resident, or in which the franchisee’s place of business is located; deprive a franchisee of the right to commence an action against the franchisor for violation of this Act, or for breach of the franchise agreement, or of any agreement or stipulation ancillary or collateral to the franchise, in a court in the State of the franchisee’s principal place of business; or prevent a franchisee from bringing or participating in any of the following actions:
A consolidated action or consolidated arbitration. A mass action or mass arbitration. A class action under Rule 23 of the Federal Rules of Civil Procedure. A class arbitration as authorized by the American Arbitration Association Supplementary Rules for Class Arbitrations. A similar consolidated, mass, or class proceeding permissible under State or Federal statutory or common law, or under the rules of any other arbitration association. Compliance with this Act or with an applicable State franchise law is not waived, excused, or avoided, and evidence of violation of this Act or of such State law shall not be excluded, by virtue of an integration clause, any choice-of-law, choice-of-venue or any other provision of a franchise agreement, or an agreement ancillary or collateral to a franchise, the parol evidence rule, or any other rule of evidence purporting to exclude consideration of matters outside the franchise agreement.