Must a Burros Fries franchisee execute a general release of claims to transfer the franchise?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
ssfully complete the training programs then requiredof new franchisees at a cost of three hundred dollars ($300) per person per ½ day and our expenses, subject to increase from time to time.
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- Franchisee shall have substantially complied with all of the terms and provisions of this Agreement, any amendment hereof or successor hereto, or any other agreements between the Franchisee and our subsidiaries or affiliates and, at the time of transfer, shall not bein default;
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- Franchisee shall have executed a general release, in a form satisfactory to us, of any and all claims against us and our officers, directors, shareholders, and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state, and local laws, rules, and ordinances;
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Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, a franchisee must execute a general release of claims to transfer their franchise. Specifically, the franchisee must provide a release, in a form satisfactory to Burros Fries, that covers any and all claims against Burros Fries and its officers, directors, shareholders, and employees. This release extends to claims arising under federal, state, and local laws, rules, and ordinances.
This requirement means that as part of the transfer process, a Burros Fries franchisee gives up the right to sue Burros Fries for any reason. This includes any past issues or potential future claims that the franchisee may have against the franchisor. The release protects Burros Fries from legal action related to the franchise agreement.
However, the FDD also notes an important caveat for California franchisees. California Corporations Code §31512 voids any waiver of rights under the Franchise Investment Law (California Corporations Code §§31 000 through 31516). Business and Professions Code §20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code). This means that while a general release is typically required, California franchisees retain certain legal rights that cannot be waived, regardless of the release. Therefore, prospective franchisees should consult with a legal professional to fully understand the implications of signing a general release, especially in California.