Are 7 Brew franchise owners also required to provide a release and covenant not to sue?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD 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. Each party granting a release and its authorized signatories hereby waive and relinquish every right or benefit which he, she, or it has under Section 1542 of the Civil Code of the State of California, and any similar statute under any other state or federal law, to the fullest extent that such right or benefit may lawfully be waived.
Source: Item 23 — RECEIPTS (FDD pages 83–279)
What This Means (2025 FDD)
Yes, according to 7 Brew's 2025 Franchise Disclosure Document, franchise owners are required to provide a release and covenant not to sue. The document states that 7 Brew is entitled to a release and covenant not to sue from the franchise owner. By signing, the owners grant 7 Brew the release and covenant not to sue. This means the owners agree not to take legal action against 7 Brew for any claims released in the document.
The release covers any claims, damages, and causes of action that the owner has or may have against 7 Brew, related to the Franchise Agreement, the grant of the franchise, or the relationship between the parties. This includes claims alleging violation of deceptive trade practices, franchise laws, or other regulations. The release applies to both known and unknown claims, meaning the owner waives rights to claims they may discover in the future.
However, the release of claims does not apply to claims arising under the Washington Franchise Investment Protection Act. For franchisees based in California, the release includes a waiver of rights under Section 1542 of the Civil Code of the State of California, which relates to claims unknown at the time of signing the release. This waiver emphasizes that the franchisee is giving up rights to potential future claims, even if they are not aware of them now. Prospective franchisees should carefully consider the implications of this release and covenant not to sue, and consult with legal counsel to fully understand their rights and obligations.