Can Americas Best Value Inn require a general release of claims upon renewal?
Americas_Best_Value_Inn Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon each renewal, we reserve the right to require you to sign our then-current form of franchise agreement, and to require you and your owners to execute and deliver to us a general release, in a form satisfactory to us, of any and all claims against us and our owners, officers, directors, employees, agents, successors and assigns.
Source: Item 23 — RECEIPTS (FDD pages 71–223)
What This Means (2025 FDD)
According to the 2025 Americas Best Value Inn Franchise Disclosure Document, Americas Best Value Inn reserves the right to require franchisees and their owners to execute and deliver a general release upon renewal of the franchise agreement. This release must be in a form satisfactory to Americas Best Value Inn and covers any and all claims against Americas Best Value Inn, its owners, officers, directors, employees, agents, successors, and assigns. The initial term of the agreement is five years, with the possibility of three additional five-year terms.
This requirement means that as a condition of renewing their franchise agreement, franchisees must waive their rights to pursue any existing or future legal claims against Americas Best Value Inn. This includes known and unknown claims, which could significantly impact a franchisee's ability to seek legal recourse for any issues that may arise during the franchise term. Franchisees should carefully consider the implications of such a release and consult with legal counsel before signing.
Notably, if the hotel is located in Maryland, or if any franchisee party is a resident of Maryland, any general release provided will not apply to any liability under the Maryland Franchise Registration and Disclosure Law. Additionally, for hotels located in California or franchisees residing in California, the FDD includes a Section 1542 Acknowledgment, emphasizing the franchisee's understanding and waiver of rights concerning unknown claims under California Civil Code Section 1542. This section clarifies that the franchisee is intentionally relinquishing any unknown claims against Americas Best Value Inn, reinforcing the comprehensive nature of the release.
Prospective franchisees should seek legal counsel to fully understand the scope and implications of the general release, especially concerning potential future disputes or claims that may arise during the renewed franchise term. Understanding these conditions is crucial for making an informed decision about investing in an Americas Best Value Inn franchise.