Does the Belocal Franchise Agreement include a covenant not to sue?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Covenant Not to Sue. Franchisee covenants and agrees for itself and for the Franchisee Related Parties not to bring or allow to be brought on behalf of itself or any Franchisee Related Party, any action, cause of action, suit, or other proceeding of any kind, which has accrued or which may ever accrue, whether based in the Constitution, common law or statute, contract, tort, or in equity, for actual or punitive damages or other relief, against Franchisor and/or the Releasees arising out of, resulting from, or in any manner related to the matters referenced in Section 1.
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- No Assignment of Claims. Franchisee represents and warrants for itself and the Franchisee Related Parties that it has not assigned or transferred, or purported to assign or transfer, to any person or entity, any Claims released under Section 1 of this Agreement, and agrees to indemnify, defend and hold the Releasees harmless from and against any and all Claims based on or arising out of any such assignment or transfer, or purported assignment or transfer, of any Claims, or any portion thereof or interest therein. Franchisee represents and warrants that, since the date of the Franchise Agreement, there has been no assignment or transfer, and no purported assignment or transfer, to any person or entity of the Franchise, the Franchise Agreement, or any rights or interests therein or in the Franchisee.
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- [OMIT FOR WASHINGTON FRANCHISEES; FOR USE IN STATES OTHER THAN WASHINGTON:] Full and Independent Knowledge. Franchisee represents that it has been represented by an attorney in connection with the preparation and review of this Agreement, that it has specifically discussed with its attorney the meaning and effect of this Agreement, and that it has carefully read and understands the scope and effect of each provision contained herein. Franchisee further represents that it does not rely and has not relied upon any representation or statement made by the Franchisor or, any of the Releasees or any of their representatives with regard to the subject matter, basis, or effect of this Agreement.
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- Compromise. Franchisee agrees for itself and the Franchisee Related Parties that the releases contained herein are the result of a compromise and shall never at any time or for any purpose be considered as an admission of liability or responsibility on the part of Franchisor or the Releasees regarding any matter.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the Franchise Agreement includes a covenant not to sue. Specifically, the franchisee agrees, along with their related parties, not to initiate any legal actions against Belocal or its releasees. This encompasses any cause of action, suit, or proceeding, regardless of its basis in law or equity, for damages or other relief, that arises from or relates to matters referenced in Section 1 of the agreement.
Belocal also includes a clause where the franchisee confirms they haven't assigned any claims released under Section 1 to any other party. They agree to protect Belocal from any claims arising from such assignments. Furthermore, franchisees in states other than Washington represent that they've had legal counsel review the agreement and understand its implications, and that they haven't relied on any representations from Belocal outside of the agreement itself.
This covenant not to sue is presented as a compromise, and it explicitly states that it should not be considered an admission of liability or responsibility on Belocal's part. This type of clause is relatively common in franchise agreements, aiming to limit potential future legal disputes between the franchisee and franchisor. Prospective franchisees should carefully review this section with their legal counsel to fully understand the scope of the covenant and its potential impact on their rights.