Does the General Release in the All States M.E.D. Franchise Agreement release the Releasee from costs?
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 included in the franchise agreement does release the Releasee from costs. Specifically, the release 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. This means that by signing the release, the franchisee agrees to give up their right to pursue claims against All States M.E.D. for various types of losses or expenses.
However, there are some limitations and exceptions to this general release. For instance, 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. Additionally, a North Dakota addendum to the franchise agreement specifies that any requirement for the franchisee to pay all costs and expenses incurred by All States M.E.D. in enforcing the agreement is void. Instead, in North Dakota, the prevailing party in any enforcement action is entitled to recover all costs and expenses, including attorney's fees.
Prospective franchisees should carefully review the general release and understand its implications, particularly concerning potential claims they might have against All States M.E.D. It's also important to note the specific state law exceptions and addenda, as these can significantly alter the scope and enforceability of the release. Franchisees should seek legal counsel to fully understand their rights and obligations before signing any release.