Does the release provided by the franchisee in the Belocal Franchise Agreement apply to unknown and unanticipated claims?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
[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.]
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the franchisee acknowledges and agrees to assume the risk of unknown and unanticipated claims when signing the General Release. This means the release applies to claims that the franchisee may discover or incur after the agreement is executed, even if those claims arise from the Franchise Agreement itself.
For franchisees in California, the agreement includes a waiver of California Civil Code Section 1542, which relates to unknown claims. This waiver means that the release is intended to cover all claims, including those the franchisee doesn't know about at the time of signing. However, for franchisees in Washington, the General Release does not apply to claims arising under the Washington Franchise Investment Protection Act.
In essence, franchisees, with the exception of those in Washington regarding specific franchise investment claims, are agreeing to release Belocal from any and all claims, known or unknown, that they may have against the company. This is a significant point for prospective franchisees to consider, and Belocal recommends consulting with an attorney before executing the agreement.