Does the All States M.E.D. Franchise Agreement's General Release include a specific release of rights?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
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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 the 2024 All States M.E.D. Franchise Disclosure Document, the General Release includes a specific release of rights. The franchisee, along with their guarantors, members, officers, directors, employees, agents, successors, assigns, and affiliates, releases All States M.E.D. and its associated parties from all claims and liabilities up to the date of the release.
This specific release means that the franchisee is giving up all rights related to the transactions or occurrences covered by the agreement. This is a significant point for prospective franchisees to consider, as it limits their ability to pursue legal action against All States M.E.D. for issues arising before the release date.
However, the release does not apply to liabilities arising under certain state franchise laws, including those in California, Indiana, Maryland, Michigan, Minnesota, North Dakota, Rhode Island, and Washington. Furthermore, California Releasors expressly waive rights and benefits under California Civil Code §1542, concerning claims unknown at the time of the release that, if known, would have materially affected the settlement. Franchisees should carefully review these exceptions and understand their implications.
In practical terms, a franchisee should seek legal counsel to fully understand the scope and impact of the general release before signing the Franchise Agreement. They should also ensure they are aware of any potential claims they may have against All States M.E.D. before executing the release, as it could prevent them from pursuing those claims in the future, except for the specific statutory exceptions noted.