Are there any exceptions to the covenant not to sue in the 1 800 Packouts franchise agreement?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
Any general release shall not apply to the extent prohibited by law with respect to claims arising under the North Dakota Franchise Investment Law.
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- Releases. The following language is added to the end of Sections 2.D(4) and 14.C(6) of the Franchise Agreement:
- , provided, however, that to the extent required by Article 33 of the General Business Law of the State of New York, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of the proviso that the non-waiver provisions of GBL 687 and 687.5 be satisfied.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 1 800 Packouts Franchise Disclosure Document, there are some exceptions to the covenant not to sue, specifically for franchisees in North Dakota and New York.
For North Dakota franchisees, the rider to the franchise agreement states that any general release shall not apply to the extent prohibited by law with respect to claims arising under the North Dakota Franchise Investment Law. This means that the standard release included in the franchise agreement does not prevent a franchisee from pursuing claims allowed under North Dakota's franchise laws.
For New York franchisees, the rider specifies that all rights and causes of action arising from the provisions of Article 33 of the General Business Law of the State of New York and its regulations remain in force. The intent is to satisfy the non-waiver provisions of GBL 687 and 687.5, ensuring that franchisees retain their rights under New York law.
These state-specific riders modify the standard franchise agreement to comply with local laws, providing franchisees with certain protections and rights that would otherwise be waived by a general release. Prospective franchisees should carefully review these riders to understand their rights and obligations within their specific state.