In the All States M.E.D. Franchise Agreement, what is the effect of the General Release on the Franchisee's members?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
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- Release- Franchisee and all of Franchisee's guarantors, members, officers, directors, employees, agents, successors, assigns and affiliates fully and finally release and forever discharge Releasee, its past and present agents, employees, officers, directors, members, Franchisees, successors, assigns and affiliates (collectively "Released Parties") from any and all claims, actions, causes of action, contractual rights, demands, damages, costs, loss of services, expenses and compensation which Franchisee could assert against Released Parties or any of them up through and including the date of this Release.
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- THIS IS A SPECIFIC RELEASE GIVING UP ALL RIGHTS WITH RESPECT TO THE TRANSACTIONS OR OCCURRENCES THAT ARE BEING RELEASED UNDER THIS AGREEMENT.
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- California Releasor- You represent and warrant that YOU EXPRESSLY WAIVE ANY AND ALL RIGHTS AND BENEFITS UNDER CALIFORNIA CIVIL CODE §1542, which provides as follows:
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.
- The above Release shall not apply to any liabilities arising under the California Franchise Investment Law, the California Franchise Relations Act, Indiana Code § 23-2-2.5.1 through 23-2-2.7-7, the Maryland Franchise Registration and Disclosure Law, Michigan
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the General Release within the franchise agreement extends to the franchisee's members, officers, directors, employees, agents, successors, assigns, and affiliates. This means these parties also fully and finally release and forever discharge All States M.E.D. and its related parties from any and all claims, actions, and causes of action they could assert against All States M.E.D. up to the date of the release. This includes contractual rights, demands, damages, costs, loss of services, expenses, and compensation.
The General Release specifically gives up all rights with respect to the transactions or occurrences that are being released under the agreement. However, this release does not apply to liabilities arising under specific state franchise laws such as the California Franchise Investment Law, the California Franchise Relations Act, Indiana Code, the Maryland Franchise Registration and Disclosure Law, Michigan Franchise Investment Law, Minnesota Franchise Act, North Dakota franchise laws, the Rhode Island Investment Act, and the Washington Franchise Investment Protection Act.
For a prospective All States M.E.D. franchisee, this means that upon termination or transfer of the franchise, not only the franchisee but also their associated parties (members, officers, etc.) must sign a release giving up any claims against All States M.E.D. This is a broad release, but it is subject to certain exceptions, particularly concerning franchise laws in specific states. Franchisees should be aware of the implications of this release and consult with legal counsel to understand their rights and obligations fully, especially in states with franchise-specific protections.