Can Bb.Q Chicken require a general release of claims as a condition of approving a transfer?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ct interest in you, in this Agreement, in the Franchised Business and/or any of the Franchised Business's material assets (other than in connection with replacing, upgrading or otherwise dealing with such assets as required or permitted by this Agreement), without our prior written consent. Any purported assignment or transfer, by operation
of law or otherwise, made in violation of this Agreement shall be null and void and shall constitute a material event of default under this Agreement.
- 14.2.2 If you wish to transfer all or part of your interest in the Franchised Business, any of the Franchised Business's material assets (except as provided in Section 14.2.1 above) or this Agreement, or if you or a Principal wishes to transfer or permit a transfer of any ownership interest in you, then in each such case (any or all of which are referred to in this Article 14 as a "Restricted Transfer"), transferor and the proposed transferee shall apply to us for our consent. We shall not unreasonably withhold our consent to a Restricted Transfer.
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, Bb.Q Chicken may require a general release of claims as a condition of approving a transfer. Specifically, as a condition of approval for a transfer, the transferor and its Principal(s) must execute a general release, in a form reasonably satisfactory to Bb.Q Chicken. This release covers any and all claims against Bb.Q Chicken, its officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees, in both their corporate and individual capacities. The claims include, but are not limited to, those arising under the Franchise Agreement and federal, state, and local laws, rules, and regulations.
This requirement means that if a franchisee wishes to transfer their Bb.Q Chicken franchise to another party, they (and their Principals) must sign a release that waives any existing or potential future claims against Bb.Q Chicken. This is a significant condition, as it prevents the franchisee from pursuing legal action against the franchisor, even for issues that may arise from the franchise agreement itself or other business-related matters.
Such a requirement is not uncommon in franchising, as it aims to protect the franchisor from potential litigation following a transfer. However, franchisees should carefully consider the implications of signing such a release, as it could limit their legal options in the future. It is advisable for prospective franchisees to seek legal counsel to fully understand the scope and impact of the general release before agreeing to it.
Bb.Q Chicken's stipulation that the release be in a form "reasonably satisfactory" to them does offer some small degree of potential negotiation, but ultimately the franchisee must comply with this requirement to complete the transfer.