What is the effect of the Transferor and Transferor Principal irrevocably and unconditionally releasing the Franchisor Releasees in the Belocal Transfer Agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Transferor and each Transferor Principal, for themselves and on behalf of all other persons or entities acting on any of their behalf or claiming under any of them ("Releasing Parties"), hereby irrevocably and unconditionally release, acquit, and forever discharge Franchisor, Franchisor's predecessors, parents, subsidiaries, and affiliates, their respective 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, past and present, and all persons acting by, through, under or in concert with any of them ("Franchisor Releasees") or any of them, from all actions, causes of action, suits, debts, liens, obligations, promises, liabilities, claims, rights, demands, damages, controversies, losses, costs, and expenses (including attorneys' fees and costs actually incurred), known or unknown, suspected or unsuspected, fixed or contingent, which any of them now has, owns, holds, claims to have, claims to own, or claims to hold, or at any time heretofore had, owned, held, claimed to have, claimed to own, or claimed to hold (collectively, "claims") against each or any of the Franchisor Releasees, including but not limited to those arising out of or relating to the Franchise Agreement and the relationships created thereby, any other agreement between any Franchisor Releasee on the one hand and any Releasing Party on the other hand, and the offer or sale of the N2 publication franchise opportunity.
[INCLUDE THE FOLLOWING SENTENCE FOR TRANSFERS IN WASHINGTON ONLY: This release in paragraph 5(b) 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, the Transferor and Transferor Principal, on behalf of themselves and related parties, irrevocably and unconditionally release Belocal and its related entities and individuals from all claims. This includes any actions, suits, debts, liabilities, and demands, whether known or unknown, that they have or may have against Belocal. This release extends to claims arising from the Franchise Agreement, any other agreements, and the offer or sale of the Belocal franchise opportunity.
In essence, this means that the Transferor (the existing franchisee selling their franchise) and the Transferor Principal (typically owners or controlling parties of the transferring entity) give up any right to sue Belocal for any reason, with some exceptions. This includes past, present, and future claims related to the franchise agreement or the transfer process itself. This is a standard practice in franchise transfers to provide the franchisor with legal protection and a clean break from the outgoing franchisee.
However, it's important to note that for transfers occurring in Washington state, this release does not apply to claims arising under the Washington Franchise Investment Protection Act. This Act provides certain protections to franchisees in Washington, and these rights are preserved despite the general release. The document also states that the parties acknowledge they have carefully read and fully understand the release provisions, and that they have had a reasonable opportunity to consult with an attorney prior to executing the Transfer Agreement, and that the execution of the Transfer Agreement is voluntary.
Prospective franchisees should be aware of the broad scope of this release and its implications. It is highly recommended that both the transferor and transferee consult with legal counsel to fully understand their rights and obligations before signing the Transfer Agreement. This ensures that they are making an informed decision and are not unknowingly giving up valuable legal claims. The franchisor also advises them to consult with an attorney before executing the Transfer Agreement.