Are there any conditions under which Big O Tires can contest the validity of a Rider?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN THE CREDITOR'S FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY THE CREDITOR, MUST HAVE MATERIALLY AFFECTED THE CREDITOR'S SETTLEMENT WITH THE DEBTOR.
The following provision applies for Franchisees in North Dakota:
It is intended that this Rider shall be effective as a bar to each and every action and cause of action related to the released claims, whether known or unknown, foreseen or unforeseen, suspected or unsuspected, that each party may have against the Big O Parties and Franchisee expressly waives any and all rights under Section 9-13-02 of the North Dakota Century Code, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN THE CREDITOR'S FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY THE CREDITOR, MUST HAVE MATERIALLY AFFECTED THE CREDITOR'S SETTLEMENT WITH THE DEBTOR.
The following provision applies for Franchisees in South Dakota:
It is intended that this Rider shall be effective as a bar to each and every action and cause of action related to the released claims, whether known or unknown, foreseen or unforeseen, suspected or unsuspected, that each party may have against the Big O Parties and Franchisee expressly waives any and all rights under Section 20-7-11 of the South Dakota Codified Laws, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO 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.
The following provision applies for Franchisees in Washington:
This release does not apply with respect to any claims under the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder.
- Effectiveness of Agreement. The terms and conditions of this Rider are in addition to or in explanation of the existing terms and conditions of the Agreement and shall prevail over and supersede any inconsistent terms and conditions thereof.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to the 2025 Big O Tires Franchise Disclosure Document, there are specific conditions under which the validity of a Rider agreement may be contested, particularly concerning general releases and claims. The general release does not extend to claims that the creditor (Big O Tires) does not know or suspect to exist in the creditor's favor at the time of executing the release, which, if known by the creditor, must have materially affected the creditor's settlement with the debtor (the franchisee). This means that if Big O Tires was unaware of certain claims at the time of the release, they may still be able to pursue those claims if they would have significantly altered the settlement.
For franchisees in North Dakota and South Dakota, there are specific waivers related to this general release. Franchisees in these states expressly waive any and all rights under Section 9-13-02 of the North Dakota Century Code and Section 20-7-11 of the South Dakota Codified Laws, respectively, which contain similar provisions regarding claims unknown at the time of executing a release. However, for franchisees in Washington, the release does not apply to claims under the Washington Franchise Investment Protection Act, RCW 19.100, and its associated rules. This implies that Big O Tires cannot enforce a release that would prevent a franchisee in Washington from pursuing claims under the state's franchise law.
These stipulations are crucial for prospective franchisees to understand, as they define the scope and limitations of any general releases they may be required to sign. Franchisees should be aware of their rights and the specific state laws that may protect them, regardless of any release. It is also important to note that the terms and conditions of any Rider are in addition to or in explanation of the existing terms and conditions of the Franchise Agreement and shall prevail over and supersede any inconsistent terms and conditions thereof.