What is the purpose of the Belocal General Release form?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
EXHIBIT G FORM OF GENERAL RELEASE
[Current Form for Transfers and Other Occasions]
- Release of Claims. Franchisee and its Principals, for themselves and on behalf of their respective guarantors, predecessors, parents, subsidiaries, affiliates, 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 (collectively referred to as the "Franchisee Related Parties") irrevocably and unconditionally release and forever discharge Franchisor, Franchisor's predecessors, parents, subsidiaries, and affiliates, and 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, and all persons acting by, through, under or in concert with any of them (collectively "Releasees"), from all actions, causes of action, suits, debts, liens, contracts, agreements, obligations, promises, liabilities, claims, rights, demands, damages, controversies, losses, costs, and expenses (including attorneys' fees and costs actually incurred) of any nature whatsoever, known or unknown, suspected or unsuspected, fixed or contingent ("Claim" or "Claims"), which they now have or claim to have or at any time heretofore have had or claimed to have against each or any of the Releasees, including, without limitation, any and all such Claims arising from, based upon or related to the Franchise Agreement.
[For California franchisees, add: Each of the Releasing Parties expressly waives and relinquishes all rights and benefits which either may now have or in the future have under and by virtue of California Civil Code Section 1542. The Releasing Parties do so understanding the significance and consequence of such specific waiver. Section 1542 provides that "[a] general release does not extend to claims which the creditor does not know or suspect exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." For the purpose of implementing a general release and discharge as described in Section 1 above, the Releasing Parties expressly acknowledge that this Agreement is intended to include in its effect, without limitation, all claims described in Section 1 above which the Releasing Parties do not know or suspect to exist in their favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims.]
[FOR WASHINGTON FRANCHISEES, ADD: This General Release does not apply with respect to claims arising under the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder.]
2. Unknown Claims.
- (a) Franchisee acknowledges for itself and the Franchisee Related Parties that there is a risk that, subsequent to the execution of this Agreement, it will discover, incur, or suffer Claims which are unknown or unanticipated at the time this Agreement is executed, including, without limitation, unknown or unanticipated Claims which arose from, are based upon, or are related to the Franchise Agreement or some part or aspect thereof, which if known by Franchisee on the date this Agreement is being executed may have materially affected its decision to execute this Agreement.
- (b) Franchisee acknowledges and agrees for itself and the Franchisee Related Parties that by reason of the release contained in Section 1 above, it is assuming the risk of such unknown and unanticipated Claims; and agrees that its release of the Releasees contained in this Agreement applies thereto.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the General Release form, as detailed in Exhibit G, serves to release Belocal from potential claims by the franchisee. This release covers all actions, debts, liens, contracts, agreements, obligations, liabilities, claims, rights, demands, damages, controversies, losses, costs, and expenses, whether known or unknown, suspected or unsuspected, that the franchisee may have against Belocal. This includes claims related to the Franchise Agreement itself. The release extends not only to the franchisee but also to their principals, guarantors, predecessors, parents, subsidiaries, affiliates, shareholders, members, partners, officers, directors, managers, employees, agents, representatives, attorneys, accountants, heirs, executors, administrators, family members, successors, and assigns.
The General Release also addresses the risk of unknown claims. Belocal acknowledges that franchisees may later discover claims that were unknown or unanticipated at the time of signing the agreement. By signing the release, the franchisee assumes the risk of such unknown claims and agrees that the release applies to them. This means that even if a franchisee later discovers a valid claim against Belocal that they were unaware of at the time of the release, they are still bound by the terms of the release and cannot pursue legal action.
However, there are some exceptions to the General Release. For franchisees in Washington, the release does not apply to claims arising under the Washington Franchise Investment Protection Act. Similarly, for transfers involving California residents, there is a specific waiver of rights under California Civil Code Section 1542, which relates to claims that the releasing party does not know or suspect to exist at the time of executing the release. This waiver ensures that the release covers even unknown claims, with the releasing party acknowledging they understand the significance of waiving such rights.
In practical terms, a prospective Belocal franchisee should carefully review the General Release form and understand its implications before signing. It is advisable to consult with an attorney to fully understand the rights being waived and the potential risks involved. Franchisees should also be aware of any state-specific exceptions or waivers that may apply to them, such as those in Washington and California. This form is typically used during transfers of the franchise or other occasions where a release of claims is deemed necessary by Belocal.