Who is included in the covenant not to sue in the Belocal Transfer Agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Covenant Not to Sue. Assignor hereby covenants and agrees for itself and for its assigns, heirs, representatives, agents, family members, and all other persons acting on its behalf or claiming under them (collectively, "Covenantors") not to participate in, bring, or allow to be brought on behalf of any Covenantor, 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 any Released Party arising out of, resulting from, or in any manner related to the matters released in Section 5.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the covenant not to sue within the Transfer Agreement applies to the assignor and extends to their assigns, heirs, representatives, agents, family members, and all other persons acting on their behalf or claiming under them, who are collectively referred to as "Covenantors."
This means that the assignor (the party transferring their rights) agrees that neither they nor anyone associated with them will bring any legal action against the released party. This includes a broad range of individuals and entities connected to the assignor, ensuring comprehensive protection for the other party involved in the transfer.
For a prospective Belocal franchisee, this clause is significant because it outlines who is bound by the agreement not to sue. If a franchisee is transferring their franchise, they need to understand that this covenant extends beyond just themselves to include family members, agents, and anyone else acting on their behalf. This ensures that once the transfer agreement is in place, there is a clear understanding that no legal actions related to the released matters can be initiated by the franchisee or anyone connected to them.
This type of clause is common in franchise agreements to prevent future litigation and provide certainty for all parties involved in the transfer. It is important for franchisees to fully understand the scope of this covenant and discuss it with their legal counsel to ensure they are aware of all its implications.