What is the effect of the 'Risk of Changed Facts' clause in the 1 800 Packouts General Release?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- Risk of Changed Facts. Franchisee, Transferee, and Guarantors understand that the facts in respect of which the release in Section 1 is given may turn out to be different from the facts now known or believed by them to be true.
Franchisee, Transferee, and Guarantors hereby accept and assume the risk of the facts turning out to be different and agree that the release in Section 1 shall nevertheless be effective in all respects and not subject to termination or rescission by virtue of any such difference in facts.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 1 800 Packouts Franchise Disclosure Document, the 'Risk of Changed Facts' clause within the General Release has significant implications for franchisees, transferees, and guarantors. This clause stipulates that even if the facts underlying the release turn out to be different from what the releasors (franchisee, transferee, and guarantors) initially knew or believed, the release remains fully effective. This means the release cannot be terminated or rescinded due to any discrepancies or new information that may emerge later.
In practical terms, this clause places the onus on the franchisee, transferee, and guarantors to conduct thorough due diligence before signing the General Release. They are essentially agreeing to release 1 800 Packouts from any and all claims, known or unknown, even if future discoveries reveal previously unknown issues or liabilities. This could include financial discrepancies, operational problems, or legal matters that were not apparent at the time of the release.
The 'Risk of Changed Facts' clause is a common legal protection for franchisors. However, it is crucial for prospective 1 800 Packouts franchisees to understand the scope of this clause and its potential impact. Before signing any release, franchisees should seek legal counsel to fully assess the risks involved and ensure they are comfortable with the potential for unforeseen issues to arise. This clause underscores the importance of careful investigation and informed decision-making when entering into or transferring a franchise agreement with 1 800 Packouts.