Does the All States M.E.D. Franchise Agreement require a California releasor to waive rights under California Civil Code §1542?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
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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 franchise agreement includes a release that requires a California releasor to expressly waive any and all rights and benefits under California Civil Code §1542. This code states that a general release does not apply to claims the creditor doesn't know about, which if known, would have significantly affected their settlement with the debtor.
Specifically, the All States M.E.D. franchise agreement stipulates that the franchisee, along with their guarantors, members, officers, directors, employees, agents, successors, assigns, and affiliates, must release the franchisor and its related parties from all possible claims up to the date of the release. This includes giving up all rights related to the transactions or occurrences being released under the agreement.
However, the release does not apply to liabilities arising under specific laws, including the California Franchise Investment Law and the California Franchise Relations Act, among others from different states. This means that while franchisees waive some rights, certain legal protections remain intact under California franchise laws.