What is the effect of the assignment of the Belocal franchise agreement on the Assignor?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Assignor, for itself and on behalf of its guarantors, predecessors, parents, affiliates, subsidiaries, shareholders, members, partners, officers, directors, managers, employees, agents, representatives, attorneys, accountants, heirs, executors, administrators, family members, successors, and assigns, and all other persons acting on their behalf or claiming under them ("Assignor Releasing Parties"), hereby release, acquit, and forever discharge Franchisor, Franchisor's predecessors, parents, subsidiaries, and affiliates, and their present and former officers, directors, shareholders, partners, managers, members, agents, representatives, independent contractors, servants, employees, attorneys, accountants, guarantors, successors, and assigns, past and present, in their corporate and individual capacities, and all persons acting by, through, under or in concert with any of them ("Released Parties"), from all claims and damages whether known or unknown, which Assignor Releasing parties, or any of them, have, had, or claim to have against Released Parties, or any of them, including but not limited to claims arising out of or relating to the performance or non-performance of the Franchise Agreement or the relationships created thereby, this Agreement, and/or any other agreement between Assignor, Assignor's Principals, and/or entity owned in whole or in part by Assignor or Assignor's Principals on the one hand and Franchisor and/or any of its affiliates on the other hand. Excepted from this release are any contractual obligations under this Agreement, which remain in full force and effect.
[INCLUDE THE FOLLOWING SENTENCE FOR TRANSFERS IN WASHINGTON ONLY: The release in this Section 5 does not apply with respect to claims arising under the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder.]
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, when a franchise agreement is assigned, the assignor (the original franchisee) is significantly affected through a release of claims. Specifically, the assignor releases Belocal (the franchisor) from nearly all claims and damages related to the franchise agreement. This release covers known and unknown claims, arising from the performance or non-performance of the franchise agreement, or any other agreements between the assignor and Belocal. This comprehensive release extends to the assignor's related parties, including guarantors, predecessors, shareholders, and family members. However, any contractual obligations specifically outlined and still in effect under the assignment agreement are excluded from this release.
This release means the assignor gives up the right to sue Belocal for any past issues related to the franchise. This includes disputes over how the franchise was operated, any breaches of contract, or any other grievances. The assignor is essentially starting with a clean slate, free from potential legal action by the franchisor, but also relinquishing their right to take action against the franchisor.
Belocal also requires the assignor to acknowledge they have read and understood the implications of this release, including having the opportunity to consult with an attorney. The assignor must confirm they are entering the agreement voluntarily and not relying on any representations made by Belocal. This is reinforced by a covenant where the franchisee agrees not to bring any action against the Franchisor and/or the Releasees arising out of, resulting from, or in any manner related to the matters referenced in the agreement. This acknowledgement aims to ensure the assignor is fully aware of the rights they are giving up and that the decision is made with informed consent.
For a prospective franchisee, this highlights the importance of understanding all terms of the franchise agreement and assignment agreement, including the release of claims. It is essential to seek legal counsel to fully grasp the implications before signing any documents related to the transfer of the Belocal franchise.