Must a Bombs Away franchisee sign a general release to renew their franchise agreement?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
e agreements attached to this disclosure document.**
| Provision | Section in franchise or | Summary |
|---|---|---|
| other agreement | ||
| a. Length of the franchise | § 3.1 | 10 years from date of franchise agreement. |
| term | ||
| b. Renewal or extension of | For our franchise system, “renewal” means | |
| the term | that at the end of your term, you sign our successor franchise agreement for an additional term. You must sign our then current franchise agreement, which may contain materially different terms and conditions than your original contract. | |
| c. Requirements for | To renew, you must give advance notice to | |
| franchisee to renew or | ||
| extend | us; be in compliance with all contractual obligations to us and third parties; conform your business to then-current standards for new franchisees; sign then-current form of franchise agreement and related documents (including personal guaranty); sign general release (unless prohibited by applicable law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 28–31)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees typically must sign a general release to renew their franchise agreement, although this requirement may be subject to applicable laws. Specifically, to renew the franchise agreement, a franchisee must provide advance notice, comply with all contractual obligations to Bombs Away and third parties, conform their business to the then-current standards for new franchisees, sign the then-current form of franchise agreement and related documents (including a personal guaranty), and sign a general release.
The requirement to sign a general release upon renewal is a fairly common practice in franchising. It protects Bombs Away from potential future claims by the franchisee related to the original franchise term. However, the FDD notes an exception: the general release is not required if prohibited by applicable law. This acknowledges that some state laws may restrict the use of general releases in certain contexts.
Prospective Bombs Away franchisees should be aware of this renewal requirement and understand what a general release entails. It is advisable to consult with a legal professional to fully understand the implications of signing such a release and to determine if any state laws might affect its enforceability in their specific situation. Franchisees should also carefully review the then-current franchise agreement to understand any changes or updates from the original contract.