Are Washington Belocal franchisees subject to the acknowledgements regarding releases in the Transfer Agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- [OMIT FOR WASHINGTON FRANCHISEES; FOR USE IN STATES OTHER THAN WASHINGTON:] Acknowledgments Regarding Releases.
By affixing their signatures to this Transfer Agreement, the parties acknowledge that they have carefully read and fully understand the provisions of this Agreement, including, specifically, the release of claims set forth in Sections 5.a. and 5.b. of this Agreement, and that their release of such claims is knowing and voluntary.
Transferor and each Transferor Principal acknowledges that it has had a reasonable opportunity to consult with an attorney prior to executing this Transfer Agreement and that the execution of this Transfer Agreement is voluntary.
Transferor and each Transferor Principal further acknowledge that Franchisor has advised them to consult with an attorney before executing this Transfer Agreement.
Each party represents that it does not rely, and has not relied upon, any representation or statement made by any of the Franchisor Releasees or any of the Transferor Parties, as the case may be, or any of their representatives, with regard to the subject matter, basis, or effect of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Washington franchisees are exempt from certain acknowledgments regarding releases in the Transfer Agreement. Specifically, the FDD states that the acknowledgments regarding releases are to be omitted for Washington franchisees and used only in states other than Washington. This means that Belocal franchisees in Washington will not be subject to the standard acknowledgments that involve acknowledging they have read and understood the release of claims within the Transfer Agreement, had the opportunity to consult with an attorney, and did not rely on any representations from the franchisor or transferor.
This exemption is significant because it suggests that Washington law provides specific protections to franchisees during franchise transfers. By omitting these acknowledgments, Belocal is ensuring compliance with Washington's franchise regulations, particularly the Washington Franchise Investment Protection Act. This Act aims to protect franchisees from potentially unfair or overreaching terms in franchise agreements.
For a prospective Belocal franchisee in Washington, this means that the transfer process may have fewer requirements related to releasing claims compared to franchisees in other states. However, it is important to note that while the standard acknowledgments are omitted, other provisions of the Transfer Agreement will still apply. Additionally, the release in Section 5 of the transfer agreement does not apply to claims arising under the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder.
It is advisable for potential Belocal franchisees in Washington to carefully review the entire Transfer Agreement and seek legal counsel to fully understand their rights and obligations under Washington law. This will ensure they are aware of any specific protections or requirements that apply to them during the transfer process.