Does the All Team General Release cover costs related to litigation for All Team?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, Releasor hereby agrees, covenants and promises as follows:
Releasor, on behalf of itself and each of the persons and entities described in Section 2 hereof, hereby absolutely and forever releases, remises and discharges Franchisor and each of the persons and entities described in Section 3 hereof, from any and all claims, demands, damages, liabilities, costs (including, but not limited to reasonable attorneys' fees, accounting fees or experts' fees, and the costs of litigation, arbitration or other proceedings), expenses, liens, losses, charges, audits, investigations, injunctions, orders, rulings, subpoenas, controversies, obligations, debts, loans, interest, dues, accounts, awards, reckonings, bonds, bills, covenants, promises, undertakings, variances, trespasses, judgments, executions, sums of money owed, arbitrations, suits, decisions, proceedings, verdicts entered, issued, made or rendered and causes of action of every kind and nature whatsoever, whether now known or unknown, suspected or unsuspected, which Releasor now has, owns or holds, or at any time heretofore ever had, owned or held, or could, shall or may hereafter have, own or hold, pertaining to, arising out of or in connection with the Franchise Agreement, any related agreements or the franchisor-franchisee relationship between Releasor and Franchisor.
Notwithstanding the foregoing, if this General Release is entered into in conjunction with the renewal, assignment or transfer of the Franchise Agreement, the foregoing release shall not apply to any liability under any state franchise law which governs this Release.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the General Release requires the franchisee (Releasor) to release All Team (Franchisor) from various claims and liabilities. This includes costs related to litigation. Specifically, the release covers 'costs (including, but not limited to reasonable attorneys' fees, accounting fees or experts' fees, and the costs of litigation, arbitration or other proceedings)'.
This means that by signing the General Release, a franchisee agrees to waive their right to pursue claims against All Team for a wide range of issues, including legal costs. This waiver extends to any and all claims, known or unknown, that the franchisee may have against All Team, arising out of the franchise agreement or the franchisor-franchisee relationship. The release also extends to All Team's officers, directors, owners, employees, representatives, agents, trustees, successors, affiliates, and assigns, as well as their insurers and underwriters.
However, there is an exception: if the General Release is signed in conjunction with the renewal, assignment, or transfer of the Franchise Agreement, the release does not apply to any liability under any state franchise law which governs the Release. Furthermore, for franchises located in Minnesota, Minnesota Rules prohibit a franchisor from requiring a franchisee to assent to a general release.
Prospective franchisees should carefully consider the implications of signing such a broad release, as it significantly limits their ability to seek legal recourse against All Team. It is advisable to seek independent legal counsel to fully understand the scope and impact of the General Release before signing it.