Must a Better Blend franchisee sign a general release to renew their franchise agreement?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
the agreements attached to this disclosure document.**
| Provision | Section in franchise | Summary |
|---|---|---|
| or other agreement | ||
| a. Length of the franchise term | Franchise | The term of the franchise agreement is 10 years from date of signing. The MUDA will expire on the date that your last franchise is scheduled to open. |
| Agreement (FA): § | ||
| 3.1 | ||
| Multi-Unit | ||
| Development | ||
| Agreement | ||
| (MUDA): §1(a) | ||
| b. Renewal or extension | FA: § 3.2 | You may obtain a successor franchise |
| of the term | ||
| MUDA: none | agreement for up to two additional 5-year | |
| terms. | ||
| c. Requirements for | For our franchise system, “renewal” means that | |
| franchisee to renew or | ||
| extend | ||
| at the end of your term, you sign our successor | ||
| franchise agreement for an additional five-year | ||
| term. You may be asked to sign a contract with | ||
| materially different terms and conditions than | ||
| your original contract. | ||
| To renew, you must give advance notice to us; | ||
| be in compliance with all contractual | ||
| obligations to us and third parties; renovate to | ||
| our then-current standards; sign then-current | ||
| form of franchise agreement and related | ||
| documents (including personal guaranty); |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–38)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, to renew a franchise agreement for an additional five-year term, a franchisee must sign a general release, unless prohibited by applicable law. This requirement is part of the renewal process, which also includes giving advance notice, complying with all contractual obligations to Better Blend and third parties, renovating to then-current standards, signing the then-current form of franchise agreement and related documents (including personal guaranty), not having defaulted more than twice under the franchise agreement, complying with all requirements of ethics and values, and paying a renewal fee.
The inclusion of a general release means that, as part of renewing their franchise agreement, Better Blend franchisees may be required to release the franchisor from any known or unknown claims or liabilities. This is a fairly common practice in franchising, intended to provide a clean slate for the renewed relationship. However, the FDD notes an exception: the release is not required if prohibited by applicable law.
This requirement has significant implications for prospective franchisees. Before renewing, a franchisee should carefully consider whether they have any potential claims against Better Blend. Signing the release would waive those claims. If a franchisee is unsure, they should seek legal advice before proceeding with the renewal. The exception for legal prohibitions suggests that some state laws may restrict the use of general releases in franchise renewals, so franchisees should be aware of the laws in their specific jurisdiction.
If a Better Blend franchisee continues to operate their franchise after the expiration of the term without a renewal agreement, Better Blend has the option to either terminate the operation at any time or deem the agreement renewed for a five-year term and collect the renewal fee. This highlights the importance of addressing the renewal process proactively to avoid potential disruptions or unexpected financial obligations.