Under the Belocal covenant not to sue, who is included in the definition of "Covenantors"?
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 extends to the assignor and includes their assigns, heirs, representatives, agents, family members, and all other persons acting on their behalf or claiming under them. These individuals and entities are collectively referred to as "Covenantors."
This means that when an assignor agrees to the covenant not to sue, they are also binding these listed related parties to the agreement. This prevents any of these parties from initiating legal action related to the matters released in Section 5 of the agreement. This is a broad definition intended to prevent any related party from circumventing the agreement.
For a prospective Belocal franchisee, this definition is important because it clarifies the scope of the covenant not to sue. It ensures that not only the assignor but also their close associates and representatives are prevented from bringing related legal actions. Franchisees should carefully review Section 5 to understand exactly what matters are being released under this covenant and consider the implications for themselves and their related parties.