Does the release in the Apricot Lane franchise agreement cover claims that are unknown at the time of the release?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
California and hereby expressly waive and relinquish any rights or benefits available under the provisions of Section 1542 of the California Civil Code or any similar law of any state that provides for the survival of claims notwithstanding a general release. Civil Code Section 1542 provides as follows:
A general release does not extend to claims that the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.
Franchisee and Owner understand this statutory language, and notwithstanding this or any similar statute, Franchisee and Owner freely elect to specifically waive these rights and hereby do release the Franchisor Parties from all claims whether known or unknown. Franchisee and Owner understand that if the facts relied upon in making this Release are discovered hereafter to be other than or different from the facts now believed to be true, or if additional facts are discovered, Franchisee and Owner expressly accept the risk of such possible different or additional facts and agrees that this Release and waiver shall remain effective notwithstanding any such discoveries. Franchisee and Owner are not deciding to make this Release predicated on any factual representations of Franchisor regarding the nature of the claims released or any other matters.
3. Limitations on Release.
This release expressly excludes, as applicable, any claims arising under the Maryland Franchise Registration and Disclosure Law or under Article 33 of the General Business Law of the State of New York or under the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder, and will not operate to limit or relieve any person from any liability imposed by Minnesota Statutes, sections 80C.01 or 80C.22.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane Franchise Disclosure Document, the release within the franchise agreement does cover claims that are unknown at the time of executing the release. The agreement specifically references California Civil Code Section 1542, which generally protects against releasing unknown claims. However, the Apricot Lane franchise agreement stipulates that franchisees expressly waive the rights and benefits available under that statute or any similar state law.
The FDD states that franchisees and owners release Apricot Lane from all claims, whether known or unknown. It emphasizes that even if facts relied upon in making the release are later discovered to be different or if additional facts come to light, the release and waiver remain effective. This means a franchisee cannot later claim they were unaware of certain facts when they signed the release.
This clause places a significant responsibility on prospective Apricot Lane franchisees to conduct thorough due diligence before signing the agreement. They are essentially agreeing to release Apricot Lane from any future claims, even those they are not currently aware of. However, the release has limitations, as it excludes claims arising under specific state franchise laws such as the Maryland Franchise Registration and Disclosure Law, Article 33 of the General Business Law of the State of New York, the Washington Franchise Investment Protection Act, and Minnesota Statutes sections 80C.01 or 80C.22.