What is the stated purpose of the Mutual General Release Agreement between Canine Dimensions and the Franchisee?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
itioning its consent to such transfer or renewal on the execution of this Mutual General Release Agreement by Franchisee.
In consideration of the mutual covenants and conditions contained in this Mutual General Release and in the Franchise Agreement, and other good and valuable consideration, receipt of which is hereby acknowledged by each of the parties, the parties agree as follows:
-
- Canine Dimensions and Franchisee do hereby mutually release and forever discharge each other and each other's heirs, successors, representatives, assigns, agents, employees, officers, and directors ("Designees"), and each of them, of and from any claims, debts, liabilities, demands, obligations, costs, expenses, actions, and causes of action of every nature, character, and description known or unknown, vested or contingent, which each party now owns or holds, or has at any time heretofore owned or held, or may at any time own or hold against the other party hereto, arising prior to and including the date of this Mutual General Release Agreement; provided, however, that this release shall exclude claims arising from assertion of any continuing rights reserved in this Mutual General Release Agreement.
-
- This release shall not apply to any claims which the Franchisee may have arising under (a) the California Franchise Investment Law or the California Franchise Relations Act; (b) the Hawaii Franchise Investment Law; (c) the Maryland Franchise Registration and Disclosure Law; (d) the Minnesota Franchise Act; (e) the New York Franchise Investment Law; (f) the North Dakota Franchise Investment Law; or (g) the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder. This release shall exclude claims arising from Franchisee's failure to pay any amounts due Canine Dimensions in the ordinary course of business. The parties expressly agree that this Mutual General Release Agreement will not apply to any claims Canine Dimensions may have under any Promissory Notes ancillary to the Franchise Agreement, or that pertain to other payment arrangements that the parties may have agreed upon.
- Waiver of California Civil Code Section 1542. Franchisee, for itself and its affiliates, parents, subsidiaries, divisions, partners, owners, shareholders, members, trustees, receivers, executors, representatives, administrators, and the respective officers, directors, agents, managers, principals, members, employees, insurers, successors, assigns, representatives and attorneys of each of them ("Constituents"), acknowledges that it is familiar with Section 1542 of the California Civil Code, which reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
- 3.2 With respect to those Claims being released pursuant to this Mutual General Release Agreement, Franchisee, for itself and its Constituents, acknowledges that it is releasing unknown claims and waives all rights it has or may have under California Civil Code Section 1542 or any other statute or common law principle of similar effect. For purposes of this Section 3, Franchisee shall be considered to be a creditor of the Designees, and each of them.
- 3.3 Franchisee acknowledges that this general release extends to claims which Franchisee does not know or suspect to exist in favor of Franchisee at the time of executing this Mutual General Release Agreement, which if known by Franchisee may have materially affected its decision to enter into this Mutual General Release Agreement. It is understood by Franchisee that the facts in respect of which this Mutual General Release Agreement is given may hereafter turn out to be other than or different from the facts in that connection known or believed to be true. Franchisee therefore, expressly assumes the risk of the facts turning out to be so different and agrees that this Mutual General Release Agreement shall be in all respects effective and not subject to termination or rescission by any such difference in facts.
-
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions's 2025 Franchise Disclosure Document, the Mutual General Release Agreement serves to discharge both Canine Dimensions and the franchisee from claims against each other. The agreement covers any claims, debts, liabilities, demands, obligations, costs, expenses, actions, and causes of action that either party may have against the other, whether known or unknown, vested or contingent, arising prior to the date of the agreement. This essentially means both parties waive their rights to sue each other for past issues.
However, this release does not apply to claims the franchisee may have under specific state franchise laws, such as the California Franchise Investment Law, Hawaii Franchise Investment Law, Maryland Franchise Registration and Disclosure Law, Minnesota Franchise Act, New York Franchise Investment Law, North Dakota Franchise Investment Law, or the Washington Franchise Investment Protection Act. It also excludes claims arising from the franchisee's failure to pay amounts due to Canine Dimensions in the ordinary course of business, as well as claims Canine Dimensions may have under any promissory notes or other payment arrangements.
The document also states that by executing the Mutual General Release Agreement, Canine Dimensions and the franchisee acknowledge they are releasing unknown claims and waiving rights under California Civil Code Section 1542 or any similar statute. This section of the California Civil Code essentially states that a general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. The franchisee assumes the risk that facts may turn out to be different from what they currently believe and agrees that the agreement will remain effective regardless of any such differences.
In practice, this agreement is intended to provide a clean break between Canine Dimensions and the franchisee regarding any past issues, with specific exceptions carved out for franchise law claims and outstanding payments. A prospective franchisee should carefully review the exceptions and understand that they are giving up the right to sue Canine Dimensions for most issues that occurred before the agreement's execution. It is also important to note that Canine Dimensions is conditioning its consent to such transfer or renewal on the execution of this Mutual General Release Agreement by Franchisee.