Is the waiver of Civil Code Section 1542 by the Beauty Bungalows Franchisee and Owner voluntary?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
- Waiver of Civil Code Section 1542. This Release is intended by Franchisee [and Owner] to be a full and unconditional general release and to constitute a full, unconditional and final accord and satisfaction, extending to all Claims of any nature, whether or not known, expected or anticipated to exist in favor of Franchisee [and Owner] against the Released Parties regardless of whether any unknown, unsuspected or unanticipated Claim would materially affect settlement and compromise of any matter mentioned herein. Franchisee [and Owner each] hereby expressly, voluntarily and knowingly waives, relinquishes and abandons each and every right, protection and benefit to which Franchisee [or Owner, as the case may be] would be entitled, now or at any time hereafter under Section 1542 of the Civil Code of the State of California, as well as under any other statutes or common law principles of similar effect to Section 1542, whether now or hereinafter existing under the laws of California, or any other applicable federal and state law with jurisdiction over the parties' relationship. Franchisee [and Owner each] acknowledges that Section 1542 of the Civil Code of the State of California provides as follows:
"A general release does not extend to claims which 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 effected his settlement with the debtor."
In making this voluntary express waiver, Franchisee [and Owner each] acknowledges that Claims or facts in addition to or different from those which are now known or believed to exist with respect to the matters mentioned herein may later be discovered and that it is the intention of Franchisee [and Owner, respectively] to hereby fully and forever settle and release any and all matters, regardless of the possibility of later discovered Claims or facts. This Release is and shall be and remain a full, complete and unconditional general release. Franchisee [and Owner each] acknowledges and agrees that the foregoing waiver of Section 1542 is an essential, integral and material term of this Release.
Source: Item 23 — RECEIPTS (FDD pages 48–177)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, the Franchisee and Owner each expressly, voluntarily, and knowingly waive, relinquish, and abandon every right, protection, and benefit to which they would be entitled under Section 1542 of the Civil Code of the State of California. This waiver extends to any other statutes or common law principles of similar effect to Section 1542, whether existing now or in the future under the laws of California, or any other applicable federal and state law with jurisdiction over the parties' relationship.
In practical terms, this means that franchisees and owners in California are giving up their rights to make claims against Beauty Bungalows for issues they are unaware of when signing the release. Section 1542 of the California Civil Code states that a general release does not extend to claims which 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.
Beauty Bungalows emphasizes that this waiver is an essential and material term of the release, indicating its importance to the agreement. The franchisee and owner acknowledge that additional claims or facts may be discovered later, but it is their intention to fully and forever settle and release all matters, regardless of any later discovered claims or facts. This comprehensive waiver is a condition of the franchise agreement, and prospective franchisees should fully understand its implications and consult with legal counsel before signing.