What is the effect of the release provided by the Americas Best Value Inn franchisee on future claims?
Americas_Best_Value_Inn Franchise · 2025 FDDAnswer from 2025 FDD Document
If the Hotel is located in California or if any of the Franchisee Parties are residents of California, the following shall apply:
Section 1542 Acknowledgment. It is the Franchisee Parties' intention, on their own behalf and on behalf of the Releasing Parties, in executing this release that this Section be and is a general release which shall be effective as a bar to each and every claim, demand, or cause of action released by the Franchisee Parties or the Releasing Parties. The Franchisee Parties recognize that they or the Releasing Parties may have some claim, demand, or cause of action against the Released Parties of which he, she, or it is totally unaware and unsuspecting, which he, she, or it is giving up by executing this release. It is the Franchisee Parties' intention, on their own behalf and
on behalf of the Releasing Parties, in executing this instrument that it will deprive him, her, or it of each such claim, demand, or cause of action and prevent him, her, or it from asserting it against the Released Parties. In furtherance of this intention, the Franchisee Parties, on their own behalf and on behalf of the Releasing Parties, expressly waive any rights or benefits conferred by the provisions of Section 1542 of the California Civil Code, which provides as follows:
"A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."
The Franchisee Parties acknowledge and represent that they have consulted with legal counsel before executing this release and that they understand its meaning, including the effect of Section 1542 of the California Civil Code, and expressly consent that this release shall be given full force and effect according to each and all of its express terms and provisions, including, without limitation, those relating to the release of unknown and unsuspected claims, demands, and causes of action.
If the Hotel is located in Maryland or if any Franchisee Party is a resident of Maryland, the following shall apply:
Any general release provided for hereunder shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
Source: Item 23 — RECEIPTS (FDD pages 71–223)
What This Means (2025 FDD)
According to the 2025 Americas Best Value Inn FDD, the effect of a release provided by the franchisee depends on the location of the hotel or the franchisee's residency. For franchisees in California, the release acts as a general waiver of all claims, including those the franchisee is unaware of at the time of signing. This means a franchisee gives up the right to pursue any future claims against Americas Best Value Inn, even if those claims are currently unknown. To ensure they understand this, franchisees acknowledge they have consulted with legal counsel and understand the implications of waiving California Civil Code Section 1542, which protects against unknowingly releasing claims.
However, this broad release does not apply universally. If the hotel is located in Maryland, or if the franchisee is a resident of Maryland, any general release will not waive rights under the Maryland Franchise Registration and Disclosure Law. This ensures that Americas Best Value Inn franchisees in Maryland retain their rights and protections under state franchise law, regardless of any general release they may sign.
In practical terms, a prospective Americas Best Value Inn franchisee needs to be aware of the specific laws governing franchise agreements in their state. If located in California, they should carefully consider the implications of waiving unknown claims and seek thorough legal advice. Franchisees in Maryland, on the other hand, have some protection against unknowingly waiving their rights under state franchise law. This difference highlights the importance of understanding the legal landscape specific to the franchisee's location and seeking counsel accordingly.