What is the franchisee covenanting not to do regarding released claims against 7 Brew?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
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. 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)
According to 7 Brew's 2025 Franchise Disclosure Document, a franchisee agrees to a covenant not to sue 7 Brew or related parties regarding claims released in the franchise agreement. This means the franchisee, along with their successors, heirs, and affiliated entities, promises not to initiate any legal action against 7 Brew Parties for any claims, damages, or liabilities related to the franchise agreement. This includes issues arising from 7 Brew's performance or failure to perform obligations, the grant of the franchise, or the franchisee's relationship with 7 Brew. The franchisee also confirms they have not assigned any released claim to another party not bound by the release. This covenant also extends to the franchisee's owners, who must also sign a release and covenant not to sue.
The release covers a broad range of potential claims, including those related to deceptive trade practices or violations of franchise laws. The franchisee acknowledges that they may discover new facts after signing the agreement but still agree to the release. However, the release of claims does not apply to claims arising under the Washington Franchise Investment Protection Act. For franchisees based in California, they acknowledge familiarity with California Civil Code Section 1542, which relates to unknown claims, and they waive any rights or benefits under that section or similar statutes in other jurisdictions.
In practical terms, this means a 7 Brew franchisee gives up the right to sue 7 Brew for many potential issues that could arise during the franchise relationship. This is a significant commitment and should be carefully considered with legal counsel. While the release has some exceptions, such as claims under the Washington Franchise Investment Protection Act, it is a broad waiver of legal rights. This type of release and covenant not to sue is common in franchise agreements, as franchisors seek to limit their liability and avoid costly litigation. Prospective franchisees should fully understand the implications before signing the agreement.