Does the 1 800 Packouts General Release include claims arising from federal laws?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Release by Franchisee, Transferee, and Guarantors. Franchisee and Transferee (on behalf of themselves and their parents, subsidiaries, and affiliates and their respective past and present officers, directors, shareholders, managers, members, agents, and employees, in their corporate and individual capacities), and Guarantors (on behalf of themselves and their respective heirs, representatives, successors and assigns) (collectively, the "Releasors") freely and without any influence forever release (i) Franchisor, (ii) Franchisor's past and present officers, directors, shareholders, managers, members, agents, and employees, in their corporate and individual capacities, and (iii) Franchisor's parent, subsidiaries, and affiliates and their respective past and present officers, directors, shareholders, managers, members, agents, and employees, in their corporate and individual capacities (collectively, the "Released Parties"), from any and all claims, debts, demands, liabilities, suits, judgments, and causes of action of whatever kind or nature, whether known or unknown, vested or contingent, suspected or unsuspected (collectively, "Claims"), which any Releasor ever owned or held, now owns or holds, or may in the future own or hold, including, without limitation, claims arising under federal, state, and local laws, rules, and ordinances and claims arising out of, or relating to, the Franchise Agreement and all other agreements between any Releasor and Franchisor or Franchisor's parent, subsidiaries, or affiliates, arising out of, or relating to any act, omission or event occurring on or before the date of this Release, unless prohibited by applicable law.
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- 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 1 800 Packouts' 2025 Franchise Disclosure Document, the General Release does include claims arising under federal laws. The release covers a broad range of claims, debts, demands, liabilities, suits, judgments, and causes of action, whether known or unknown, vested or contingent, or suspected or unsuspected. This comprehensive release extends to claims arising under federal, state, and local laws, rules, and ordinances. It also encompasses claims related to the Franchise Agreement and other agreements between the franchisee and 1 800 Packouts or its affiliates. The release applies to any act, omission, or event occurring on or before the date of the release, unless prohibited by applicable law.
This means that a franchisee, transferee, and any guarantors are giving up their rights to sue 1 800 Packouts and related parties for a wide array of potential issues, including those stemming from federal statutes. This waiver is a significant consideration for prospective franchisees, as it limits their legal recourse against the franchisor. The document also states that the parties understand that the facts underlying the release may change but agree that the release remains effective regardless of any differences in facts.
However, there are exceptions to this general release. For instance, the release does not apply to claims arising under the Washington Franchise Investment Protection Act. Additionally, riders to the franchise agreement for use in specific states like Maryland, North Dakota, New York, and Minnesota include stipulations that the general release will not waive rights or claims arising under those states' franchise laws to the extent such waiver is prohibited by law. Therefore, franchisees should carefully review the specific terms of the release and any applicable state-specific riders to understand their rights and obligations.