What is the effect of the release on the 7 Brew franchisee's ability to sue 7 Brew?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
rities Department of Financial Institutions 4822 Madison Yards Way, North Tower Madison, Wisconsin 53705 (608) 266-2139
(state administrator)
Division of Securities Department of Financial Institutions 4822 Madison Yards Way, North Tower Madison, Wisconsin 53705 (608) 266-9555
EXHIBIT H
SAMPLE GENERAL RELEASE
BREW CULTURE FRANCHISE, LLC
GRANT OF FRANCHISOR CONSENT AND FRANCHISEE RELEASE
| Traditional 7 BREW Store Number | Traditional 7 BREW Store to be Open and Operating in Territory by (Deadline) | |---|---| | | | | | | | | | | | | | | | | | | Consistent with the previous introduction, you, on behalf of yourself and your successors, heirs, executors, administrators, personal representatives, agents, assigns, partners, owners, directors, officers, principals, employees, and affiliated entities (collectively, the "Releasing Parties"), hereby forever release and discharge us and our past, present, and future parent companies, subsidiaries, affiliates, investors, investment funds, and other related entities, and each of our and their respective past, present, and future officers, directors, owners, principals, employees, agents, executors, administrators, representatives, successors, and assigns (collectively, the "7 BREW Parties") from any and all claims, damages, demands, debts, causes of action, suits, duties, liabilities, costs, and expenses of any nature and kind, whether presently known or unknown, vested or contingent, suspected or unsuspected (all such matters, collectively, "Claims"), that you and any other Releasing Party now have, ever had, or, but for this Consent, hereafter would or could have against any 7 BREW Party (1) arising out of or related in any way to the 7 BREW Parties' performance of or alleged failure to perform their obligations under the Franchise Agreement before the date of your signature below, (2) arising out of or related in any way to our offer and grant to you of your 7 BREW Store franchise, or (3) otherwise arising out of or related in any way to your and the other Releasing Parties' relationship, from the beginning of time to the date of your signature below, with any of the 7 BREW Parties.
The released Claims include, but are not limited to, any Claim alleging violation of any deceptive or unfair trade practices laws, franchise laws, or other local, municipal, state, federal, or other laws, statutes, rules, or regulations. You and the other Releasing Parties acknowledge that you and they may after the date of the signatures below discover facts different from, or in addition to, those facts currently known to you and them, or which you and they now believe to be true, with respect to the Claims released by this document. You and the other Releasing Parties nevertheless agree that the release set forth in this document has been negotiated and agreed on despite such acknowledgement and despite any federal or state statute or common law principle which may provide that a general release does not extend to claims which are not known to exist at the time of execution.
You, on behalf of yourself and the other Releasing Parties, further covenant not to sue any 7 BREW Party on any Claim released by this document and represent that you have not assigned any Claim released by this document to any individual or entity that is not bound by this document.
We also are entitled to a release and covenant not to sue from your owners. By his, her, or their separate signatures below, your owners likewise grant to us the release and covenant not to sue provided above.
This Release of Claims does not apply to claims arising under the Washington Franchise Investment Protection Act, chapter 19.100 RCW, or the rules adopted thereunder in accordance with RCW 19.100.220(2).
[The following is special language for CA-based franchisees—remove for all other states]
Each party granting a release acknowledges a familiarity with Section 1542 of the Civil Code of the State of California, which provides as follows:
"A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."
**Each party granting a release and its authorized signatories hereto recognize that he, she, or it may have some claim, demand, or cause of action against the released parties of which he, she, or it is unaware and unsuspecting, and which he, she, or it is giving up by signing this Addendum.
Source: Item 23 — RECEIPTS (FDD pages 83–279)
What This Means (2025 FDD)
According to the 2025 FDD, 7 Brew requires franchisees to sign a release that may limit their ability to sue the company. This release covers any claims arising from the performance of the Franchise Agreement, the offer and grant of the franchise, or the franchisee's relationship with 7 Brew. The release extends to a wide range of potential claims, including those related to deceptive trade practices or franchise laws. This means that a franchisee who signs the release is giving up their right to sue 7 Brew for issues that occurred before the date of signing, even if those issues are not yet known.
However, the release does have some limitations. Specifically, it does not apply to claims arising under the Washington Franchise Investment Protection Act. Additionally, for franchisees based in California, the release includes a waiver of Section 1542 of the California Civil Code, which protects against releasing claims that are unknown at the time of signing. By waiving this section, California franchisees are agreeing to give up their rights to sue for unknown claims.
This release and covenant not to sue also extends to the franchisee's owners, who must separately sign to grant the same release to 7 Brew. This ensures that not only the franchisee entity but also the individuals behind it are prevented from bringing related claims against the company. Franchisees should carefully consider the implications of signing such a broad release, as it can significantly impact their legal rights and recourse against 7 Brew.