Are Bombs Away franchisees required to sign a general release upon renewal of the Agreement?
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.
18.10 Holdover. If Franchisee continues operating the Business after the expiration of the term without a renewal agreement or successor franchise agreement executed by the parties in accordance with Section 3.2, then at any time thereafter (regardless of any course of dealing by the parties), Bombs Away Franchising may by giving written notice to Franchisee (the "Holdover Notice") either (i) require Franchisee to cease operating the Business and comply with all postclosing obligations effective immediately upon giving notice or effective on such other date as Bombs Away Franchising specifies, or (ii) bind Franchisee to a renewal term of 5 years, and deem Franchisee and its Owners to have made the general release of liability described in Section 3.2(vi).
Attachment 3 to Franchise Agreement
FORM OF GENERAL RELEASE
[This is our current standard form of General Release. This document is not signed when you purchase a franchise. In circumstances such as a renewal of your franchise or as a condition of our approval of a sale of your franchise, we may require you to sign a general release.]
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees are required to sign a general release as part of the renewal process. Specifically, to renew their franchise agreement, franchisees must execute Bombs Away's then-current standard form of franchise agreement and related documents, which includes a general release. This release involves the franchisee and each owner releasing any and all claims against Bombs Away, its affiliates, and their respective owners, officers, directors, agents, and employees.
This requirement means that as a condition of renewing their franchise agreement, a franchisee must waive any existing or potential future claims against Bombs Away. This is a significant consideration for prospective franchisees, as it limits their legal recourse against the franchisor. The FDD also includes a form of general release as an attachment, clarifying that while it is not signed when purchasing the franchise, it may be required upon renewal or as a condition of approving a sale of the franchise.
Furthermore, if a franchisee continues to operate the business after the expiration of the term without a renewal agreement, Bombs Away has the option to bind the franchisee to a renewal term of 5 years and deem the franchisee and its owners to have made the general release of liability. This holdover provision underscores the importance of understanding the implications of the general release and the renewal terms.
Prospective franchisees should carefully review the terms of the general release and consider seeking legal counsel to fully understand their rights and obligations before signing the franchise agreement and again before renewing it. Understanding the scope and implications of this release is crucial for making an informed decision about investing in a Bombs Away franchise.