What is the scope of the 'Covenant Not to Sue' provision in the Bumper Man General Release?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- **4.
Covenant Not to Sue.** Franchisee and Guarantors, on behalf of themselves and Releasors, covenant not to initiate, prosecute, encourage, assist, or (except as required by law) participate in any civil, criminal, or administrative proceeding or investigation in any court, agency, or other forum, either affirmatively or by way of cross-claim, defense, or counterclaim, against any person or entity released under Section 1 above with respect to any Claim released under Section 1 above.
- **5.
Complete Defense.** Franchisee and Guarantors: (i) acknowledge that this Release shall be a complete defense to any Claim released under Section 1 above; and (ii) consent to the entry of a temporary or permanent injunction to prevent or end the assertion of any such Claim.
- **6.
Successors and Assigns.** This Release will inure to the benefit of and bind the successor, assigns, heirs and personal representatives of Franchisor and each Releasor.
- 7. This Release of Claims does not apply to claims arising under the Franchise Investment Protection Act, chapter 19.100 RCW, or the rules adopted thereunder in accordance with RCW 19.100.220(2).
[The following is to be used only for California franchisees]
Acknowledgment of Releases under California Law. Each Party granting a release acknowledges a familiarity with Section 1542 of the Civil Code of the State of California, which provides as follows:
"A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2025 FDD)
According to the 2025 Bumper Man FDD, the "Covenant Not to Sue" within the General Release dictates that the franchisee and any guarantors, acting on behalf of themselves and related parties, agree not to initiate or participate in any legal proceedings against those released under the General Release. This includes civil, criminal, or administrative actions in any court, agency, or forum. This applies whether the action is affirmative or defensive, such as a cross-claim or counterclaim.
Bumper Man's FDD states that this release serves as a complete defense against any claim covered by Section 1 of the General Release. Franchisees and guarantors also consent to injunctive relief to prevent or stop any such claim. The release benefits and binds the successors, assigns, heirs, and personal representatives of both Bumper Man and the releasing parties.
However, the release does not apply to claims arising under the Franchise Investment Protection Act, specifically chapter 19.100 RCW, or its associated rules under RCW 19.100.220(2). For California franchisees, the document acknowledges Section 1542 of the California Civil Code, which states that a general release does not cover claims unknown at the time of signing that would have significantly affected the settlement if known. This means that franchisees in California retain some rights regarding claims they were unaware of when signing the release.
In practical terms, this means a Bumper Man franchisee gives up their right to sue the franchisor and related parties, except for specific claims protected by law. A prospective franchisee should carefully review the General Release and understand what claims are being released before signing, and seek legal counsel if needed.