Does the General Release in the All States M.E.D. Franchise Agreement release past franchisees of the Releasee?
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
- Franchise Investment Law, Minnesota Franchise Act, North Dakota franchise laws, the Rhode Island Investment Act, and the Washington Franchise Investment Protection Act.
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 that a franchisee signs releases the 'Releasee' from claims. The Releasee is defined to include All States M.E.D.'s past and present agents, employees, officers, directors, members, franchisees, successors, assigns, and affiliates. Therefore, the general release does extend to past franchisees of All States M.E.D.. This means that by signing the release, the franchisee is giving up their right to sue All States M.E.D..
This release is comprehensive, as it covers any and all claims, actions, causes of action, contractual rights, demands, damages, costs, loss of services, expenses, and compensation that the franchisee could assert against the released parties. The release extends up to and including the date it is signed. The FDD emphasizes that this is a specific release, relinquishing all rights related to the transactions or occurrences being released under the agreement.
However, the release does not apply to liabilities arising under specific state franchise laws, including those in California, Indiana, Maryland, Michigan, Minnesota, North Dakota, Rhode Island, and Washington. Furthermore, in North Dakota, franchisees are not required to sign a general release upon renewal of the franchise agreement. This addendum ensures that franchisees in North Dakota retain their rights and protections under state law, regardless of any general release clauses in the franchise agreement.
Prospective franchisees should carefully review the general release and understand its implications, particularly concerning their rights and potential claims against All States M.E.D. and related parties. It is advisable to seek legal counsel to fully comprehend the scope and effect of the release before signing the franchise agreement.