What happens if a general release is prohibited by law for an Aplus franchisee attempting to transfer their franchise?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.2.3. Franchisee (and any transferring owners, if Franchisee is a business entity) has executed a general release, in a form prescribed by Franchisor, of any and all claims against Franchisor, including its officers, directors, shareholders, managers, members, partners, owners, employees, and agents (in their corporate and individual capacities), including, without limitation, claims arising under federal, state or local laws, rules or ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of
the Franchise; provided, however, that if a general release is prohibited, Franchisee shall give the maximum release allowed by law;
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a franchisee (and any transferring owners, if the franchisee is a business entity) must execute a general release of all claims against Aplus as a condition of transferring the franchise. This release covers claims against Aplus, its officers, directors, shareholders, managers, members, partners, owners, employees, and agents in their corporate and individual capacities. The claims include those arising under federal, state, or local laws, rules, or ordinances, and any other matters related to the termination of the Franchise Agreement or the transfer of the franchisee's interest or ownership.
However, if a general release is prohibited by law in the franchisee's jurisdiction, the franchisee is required to provide the maximum release allowed by law. This means that Aplus acknowledges that some jurisdictions may have laws that restrict or prohibit the use of general releases in certain situations. In such cases, the franchisee is expected to provide a release that is as comprehensive as legally permissible under the applicable laws.
This provision ensures that Aplus attempts to obtain as much protection as possible from potential future claims when a franchise is transferred, while also complying with local laws that may limit the scope of such releases. For a prospective franchisee, this means understanding the laws in their specific state regarding general releases and how they might affect the transfer of their Aplus franchise in the future. Franchisees should consult with legal counsel to understand the implications of this clause in their specific circumstances.