Does the All States M.E.D. Franchise Agreement include a Schedule 1 that contains a General Release?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
I have received a Franchise Disclosure Document dated April 26, 2024 including the following exhibits on the date listed below:
A. List of State Administrators
- B. State Agents for Service of Process
- C. Franchise Agreement
Schedule 1-General Release
Schedule 2-Nondisclosure and Non-Competition Agreement
Schedule 3-Unlimited Guaranty and Assumption of Obligations
Schedule 4-Lease Addendum
Schedule 5-ACH Payment Agreement
Schedule 6-Holders of Legal or Beneficial Interest in Franchisee; Officers; Directors
Schedule 7-State Addenda to the Franchise Agreement
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to the 2024 All States M.E.D. Franchise Disclosure Document, the Franchise Agreement includes a Schedule 1 that contains a General Release. This is confirmed in Item 23, which lists the exhibits included in the Franchise Disclosure Document. Schedule 1 is specifically identified as containing the General Release.
This General Release is significant because it outlines the conditions under which a franchisee, or a transferee of the franchise, must release All States M.E.D. from any potential claims. Specifically, before a franchisee can transfer their franchise to someone else, they must execute a general release of any and all claims against All States M.E.D. This release covers claims against the franchisor, its officers, directors, shareholders, managers, members, partners, owners, employees, and agents, both in their corporate and individual capacities. The claims include those arising under federal, state, or local laws, rules, or ordinances, and any other matters related to the termination of the agreement or the transfer of the franchise interest.
Furthermore, the transferee (the person buying the franchise) must also execute a similar general release, protecting All States M.E.D. from any claims related to representations made about the franchise or the business. This requirement ensures that All States M.E.D. is protected from potential legal issues arising from the transfer of ownership. However, in North Dakota, franchisees are not required to sign a general release upon renewal of the franchise agreement, according to the North Dakota addendum to the franchise agreement.
Prospective franchisees should carefully review the General Release in Schedule 1 with their legal counsel to fully understand the scope of claims they are waiving and the implications of signing such a release, both when transferring the franchise and in general.