What is the exception to the release provided by the Assignor in the Belocal agreement?

According to Belocal's 2025 Franchise Disclosure Document, the release provided by the assignor has specific exceptions depending on the location of the franchise. For franchisees in Washington, the release in Section 5 of the agreement does not apply to claims arising under the Washington Franchise Investment Protection Act, specifically RCW 19.100, and its associated rules. This means that assignors in Washington retain their rights to pursue claims related to franchise investment protection under Washington law, despite the general release.

For assignors who are California residents, they must expressly waive their rights under California Civil Code Section 1542, which states that a general release does not cover claims the creditor is unaware of at the time of the release, if knowing about them would have significantly affected the settlement. By signing the agreement, California assignors acknowledge they understand and accept the risk of unknown claims and agree the release applies to them. This waiver ensures that the release is comprehensive, even for unforeseen issues.

In practical terms, a prospective Belocal franchisee needs to be aware of these state-specific exceptions and waivers when assigning their franchise agreement. If the franchise is in Washington, the assignor retains certain legal rights under franchise investment protection laws. If the assignor is in California, they are giving up their rights to claims they don't even know about yet. It is important for assignors to fully understand these implications and consult with an attorney to assess the risks and benefits before signing the agreement.