The Franchise Memorandum

In Andre v. Sellstate Realty Sys. Network, Inc., 2010 U.S. Dist. LEXIS 84853 (M.D. Fla. July 30, 2010), the franchisor moved to strike the franchisees’ jury trial demand based upon the following language in two promissory notes: “THE AREA REPRESENTATIVE, BY SIGNING OF THIS NOTE, AND THE FRANCHISOR, BY ACCEPTANCE OF THIS NOTE, MUTUALLY AND WILLINGLY WAIVE THE RIGHT TO A TRIAL BY JURY OF ALL CLAIMS BETWEEN THEM . . . .” The franchisees objected, arguing that the promissory notes were ancillary to their claims that the franchisor had made fraudulent representations and induced them to sign an area representative agreement and franchise agreement. They also argued that there was no jury waiver in the area representative agreement, the franchise agreement, or the Uniform Franchise Offering Circular, and, therefore, the franchisor’s motion should be denied. The court sided with the franchisor and granted the motion to strike the jury demand. The court held that the promissory notes were not free-standing, independent documents, but were tied to the parties’ area representative agreement. The promissory notes were specifically incorporated into the terms of the area representative agreement and UFOC.