Who is included in the general release required from the Aplus franchisee when transferring the 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, when a franchisee transfers their franchise, they (and any transferring owners, if the franchisee is a business entity) must execute a general release. This release covers any and all claims against Aplus, including its officers, directors, shareholders, managers, members, partners, owners, employees, and agents. This release applies to these individuals and entities in both their corporate and individual capacities. The claims covered include, but are not limited to, those arising under federal, state, or local laws, rules, or ordinances. It also encompasses any other matters related to the termination of the Franchise Agreement or the transfer of the franchisee's interest or ownership in the franchise.
This requirement means that a franchisee selling their Aplus franchise must waive their rights to sue Aplus and its associated parties for virtually any reason. This includes claims related to the franchise agreement itself, as well as any other aspect of their business relationship. The release is intended to provide Aplus with broad protection from potential legal action by the outgoing franchisee.
However, there is a caveat: if a general release is prohibited by law, the franchisee must provide the maximum release allowed by law. This suggests that the enforceability of the release may vary depending on the jurisdiction. A prospective franchisee should consult with a legal professional to understand the specific implications of this release in their state and to ensure they are fully aware of the rights they are waiving when transferring their Aplus franchise.