Is a Bombs Away franchisee required to execute a general release of claims against Bombs Away Franchising as a condition of renewal?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (v) Franchisee and each Owner executes a general release (on Bombs Away Franchising's then-standard form) of any and all claims against Bombs Away Franchising, its affiliates, and their respective owners, officers, directors, agents and employees.
ARTICLE 4. FEES
- 4.1 Initial Franchise Fee. Upon signing this Agreement, Franchisee shall pay an initial franchise fee in the amount stated on the Summary Page. This initial franchise fee is not refundable.
- 4.2 Royalty Fee. Franchisee shall pay Bombs Away Franchising a monthly royalty fee (the "Royalty Fee") equal to 8% of Gross Sales. The Royalty Fee for any given month is due on the 2nd day of the following month.
4.3 Marketing Fund Contribution.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, a franchisee is required to execute a general release of claims against Bombs Away Franchising as a condition of renewal. Specifically, prior to renewal, the franchisee and each owner must execute a general release, using Bombs Away's then-standard form, which covers any and all claims against Bombs Away Franchising, its affiliates, and their respective owners, officers, directors, agents, and employees.
This requirement means that as part of renewing their franchise agreement, a Bombs Away franchisee must waive their right to pursue any existing or future legal claims against the franchisor. This is a significant condition, as it potentially limits the franchisee's legal recourse should disputes arise concerning the franchise agreement. The release ensures that Bombs Away is protected from potential liabilities related to the franchisee's operations up to the point of renewal.
The FDD also includes a form of general release as an attachment. The document states that Bombs Away may require a franchisee to sign a general release in circumstances such as a renewal of the franchise. This release is executed by the franchisee in favor of Bombs Away Franchising, LLC. The franchisee agrees to release Bombs Away Franchising from any and all claims, causes of action, suits, debts, agreements, promises, demands, liabilities, contractual rights and/or obligations, of whatever nature, known or unknown.
Franchisees should carefully consider the implications of signing such a release, including consulting with legal counsel, to fully understand the rights they are waiving. This requirement is not uncommon in franchising, as franchisors often seek to limit future liabilities. However, franchisees should evaluate the potential risks and benefits before agreeing to such terms.