Does Bft require a general release of claims upon renewal or transfer of the Franchise Agreement or Multi-Unit Agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
t association or exchange.
- The following statement is added to the Remarks column of Item 6 for the row entitled Late Fees:
The highest rate of interest allowed by California law is 10% annually.
- The following paragraphs are added at the end of Item 17:
The Franchise Agreement and Multi-Unit Agreement require you to sign a general release of claims upon renewal or transfer of the Franchise Agreement or Multi-Unit Agreement. California Corporations Code Section 31512 provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of that law or any rule or order thereunder is void. Section 31512 might void a waiver of your rights under the Franchise Investment Law (California Corporations Code Section 31000 – 31516). Business and Professions Code Section 20010 might void a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 – 20043).
The Franchise Agreement contains a liquidated damages clause. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the Franchise Agreement and Multi-Unit Agreement require franchisees to sign a general release of claims upon renewal or transfer of the Franchise Agreement or Multi-Unit Agreement. However, this requirement may be subject to certain state laws that restrict such waivers. Specifically, California Corporations Code Section 31512 states that any condition that binds a person acquiring any franchise to waive compliance with any provision of that law is void. This might void a waiver of rights under the Franchise Investment Law. Additionally, California Business and Professions Code Section 20010 might void a waiver of rights under the Franchise Relations Act.
For franchisees in Maryland, any release required as a condition of renewal and/or assignment/transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law, according to COMAR 02.02.08.16L.
These stipulations mean that while Bft's standard agreements may include a general release, franchisees should be aware of their rights under state laws, which may provide additional protections and invalidate certain waiver provisions. Prospective franchisees should consult with legal counsel to understand the specific implications of these clauses in their respective states.