Franchisors often ask us whether a deed of prior representations is worth the paper it’s written on. After all, these documents are commonly included in franchise agreements or signed alongside them. They’re framed as a protective shield against claims that someone said something they shouldn’t have in the lead-up to signing. But do they actually work? And can a franchisor rely on them when a franchisee later claims misleading conduct?
Let’s break it down.
What is a Deed of Prior Representations?
A deed of prior representations is a formal document that records that a franchisee has not relied on any statement, promise or representation made by the franchisor (or its staff or agents) outside of what is written in the agreement itself. It’s usually signed at the same time as the franchise agreement, sometimes as a separate document and sometimes baked into the body of the contract.
These deeds often include a section where the franchisee is invited to list any prior statements or representations they are relying on when entering the agreement. If nothing is listed, the franchisee is typically asked to write “Nil” — making clear on the record that no extra promises were made or relied upon. The idea is to create a clear line between what was and wasn’t said.
The purpose is simple: by getting the franchisee to confirm in writing that nothing outside the agreement influenced their decision to sign, the franchisor hopes to reduce the risk of future legal claims.
Franchise lawyers refer to these documents as evidentiary tools — they help shape the paper trail if something goes wrong later. But their real legal strength is often misunderstood.
Can Franchisors Rely on Them to Avoid Legal Claims?
Not always — and franchisors should be very cautious about putting too much faith in these documents. While a deed of prior representations may sound powerful, it can’t override the law.
You can’t contract out of the Australian Consumer Law. That means you can’t stop someone from bringing a claim for misleading or deceptive conduct just because they signed a document saying they weren’t misled or didn’t rely on a certain representation or conduct. Courts have repeatedly said that a well-drafted deed may help show that a representation wasn’t relied on, but it’s not a “get out of jail free” card.
Franchise lawyers often compare this to an “entire agreement clause” — a standard clause in many contracts that says only the written terms count, and that nothing said before signing forms part of the agreement. These clauses are useful, but they don’t stop a court from looking at what actually happened — especially if the franchisee says they were misled into signing in the first place.
What Do the Cases Say?
There are plenty of examples where franchisees have successfully claimed they were misled, even after signing a deed of prior representations.
One of the clearest examples is a case where a franchisee claimed they were misled about the expected income from running the business. The franchisor argued the franchisee had signed a document confirming they hadn’t relied on any such representations. But the court said that the deed did not stop them from looking at what was actually said in the lead-up to signing.
In fact, courts have gone so far as to say that where there is significant power imbalance — as there often is in franchising — and where the franchisee is being asked to sign complex legal documents without legal advice, the court may give limited weight to any boilerplate disclaimers.
In Guirguis Pty Ltd v Michel’s Patisserie System Pty Ltd, the Queensland Court of Appeal confirmed that even where a franchisee signs a Deed of Prior Representations stating they relied on no other statements, that deed is just part of the evidentiary picture — it doesn’t stop a claim for misleading and deceptive conduct if other evidence suggests misrepresentations were made and relied upon. The deed in this case didn’t save the franchisor.
So Are These Deeds Worth Using?
Yes — but only if franchisors understand what they can and can’t do.
Our view is that deeds of prior representations are not useless, but they’re not bulletproof either. They serve an evidentiary purpose. These deeds help show what the parties understood at the time of signing. Finally, they might tip the scales in the franchisor’s favour in some cases. But they are not a substitute for doing things properly in the first place.
The best protection is to make sure all information given to a franchisee is accurate, fair and not misleading. Don’t overpromise. Don’t guess numbers. And never make informal statements that contradict what’s in the written documents.
Just like entire agreement clauses, these deeds form part of a broader legal picture. They’re one of many tools in a franchisor’s toolkit. But franchise lawyers will tell you — if there’s misleading conduct, even the best paperwork might not save you.
At Magnolia Legal, we work with franchisors to make sure their sales processes, disclosures and pre-contract conversations are all aligned. Because the best way to protect your system isn’t just signing another document. It’s making sure there’s nothing to hide from in the first place.