Can the 1 800 Packouts Franchisee rescind the General Release due to a difference in facts?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
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 1 800 Packouts's 2025 Franchise Disclosure Document, a franchisee, transferee, or guarantor cannot terminate or rescind the general release, even if the facts turn out to be different from what they initially believed. The document explicitly states that these parties assume the risk of factual differences. This means that once the release is signed, it remains effective regardless of any new or contradictory information that may emerge later. This clause is designed to protect 1 800 Packouts from future claims, even if those claims are based on misunderstandings or incomplete information at the time of the release.
This provision has significant implications for prospective franchisees. Before signing a general release, franchisees must conduct thorough due diligence and ensure they fully understand all aspects of the agreement and the potential risks involved. They should seek legal counsel to review the release and advise them on their rights and obligations. By signing the release, the franchisee acknowledges and accepts the risk that the facts may change and agrees not to pursue any claims against 1 800 Packouts based on those changes.
However, there are exceptions to this rule in certain states. For instance, the rider to the 1-800-Packouts Franchise Agreement for use in Maryland states that any general release signed as a condition to transfer or renewal will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law. Similarly, in North Dakota, any general release shall not apply to the extent prohibited by law with respect to claims arising under the North Dakota Franchise Investment Law. In New York, the release is subject to the provisions of Article 33 of the General Business Law of the State of New York. In Minnesota, any release required as a condition of renewal and/or assignment/transfer will not apply to the extent prohibited by the Minnesota Franchises Law. These state-specific provisions provide some protection to franchisees by ensuring that they do not waive their rights under state franchise laws.