What happens if a general release is prohibited during a 360 Painting franchise transfer?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
- (iii) Franchisee, the transferor and the transferee and their respective owners executing a general release, the same or similar to Franchisor's standard form of General Release, attached as Exhibit C-7, of any and all claims against Franchisor and its affiliates, subsidiaries, members, managers, officers, directors, employees and agents; provided, however, that if a general release is prohibited, Franchisee, the transferor and the transferee (as applicable) shall give the maximum release allowed by law;
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 360 Painting Franchise Disclosure Document, if a general release is prohibited during a franchise transfer, the franchisee, transferor, and transferee must provide the maximum release allowed by law. This condition is part of 360 Painting's transfer policy, which must be fulfilled before the franchisor approves the transfer.
This means that while 360 Painting prefers a standard general release to protect itself from potential liabilities, it acknowledges that some jurisdictions may restrict such broad releases. In those cases, the parties involved in the transfer must still provide the most comprehensive release permissible under the applicable laws. This ensures that 360 Painting receives as much protection as legally possible during the transfer process.
For a prospective franchisee, this implies that the specific requirements for a release during a transfer may vary depending on the state or local laws in effect at the time of the transfer. It is important to understand the legal limitations on releases in your jurisdiction to ensure compliance with 360 Painting's transfer policy. This also highlights the importance of consulting with legal counsel to navigate the transfer process and ensure all requirements are met.