When transferring an Amorino franchise, can the release of claims against Amorino be inconsistent with state law?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
- (5) You and each of your Principals shall have executed a general release, in a form satisfactory to Amorino, of any and all claims against Amorino and its Affiliates and their respective officers, directors, shareholders, members, equity holders, agents and employees in their corporate/company and individual capacities, including claims arising under federal, state and local laws, rules and ordinances; provided, however, that any release will not be inconsistent with any state law regulating franchising.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, when transferring a franchise, both the franchisee and their principals must execute a general release of claims against Amorino. However, this release cannot be inconsistent with any state law regulating franchising. This means that while Amorino requires a release to protect itself from potential liabilities, the terms of that release must adhere to the specific franchising laws of the state in which the franchise operates.
This provision protects the franchisee by ensuring that the release does not overreach and violate their rights under state law. State franchise laws often have provisions that protect franchisees from unfair or overly broad releases. For example, some states may prohibit releases that waive certain statutory rights or that are obtained through coercion or misrepresentation.
For a prospective Amorino franchisee, this means they should carefully review the release with legal counsel to ensure it complies with their state's franchise laws. They should also be aware of their rights under state law and ensure that the release does not infringe upon those rights. This clause provides a safeguard, but it is the franchisee's responsibility to ensure compliance and seek legal advice if needed.
In practice, this clause aims to balance Amorino's need to protect itself from future claims with the franchisee's right to legal protection under state laws. It is a fairly standard provision in franchise agreements, as franchisors generally seek to obtain releases upon transfer to minimize future legal risks, while franchisees need assurance that their fundamental rights are not being compromised.