What claims are released when a Casiola franchisee and owner execute the General Release?

According to Casiola's 2024 Franchise Disclosure Document, when transferring a franchise, both the franchisee and each owner must execute a General Release. This release, attached as Exhibit 5 to the Franchise Agreement, discharges Casiola, its affiliates, and its past and present officers, directors, shareholders, members, partners, agents, representatives, independent contractors, servants, and employees from any and all claims. The claims released are those against Casiola for matters arising on or before the effective date of the transfer.

This requirement means that a franchisee selling their business gives up any right to sue Casiola for issues that occurred up to the date of the sale. This could include disputes over royalties, marketing, training, or any other aspect of the franchise agreement. The new owner cannot pursue claims against Casiola that occurred before the transfer date either.

However, the FDD includes some state-specific protections. For example, in Maryland, the general release does not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. Similarly, in New York, the agreement should not be considered a waiver of any right conferred upon the franchisee by New York General Business Law, Sections 680-695. These stipulations ensure that franchisees in those states retain certain legal rights despite the general release.

Prospective franchisees should carefully review Exhibit 5 (the General Release form) and understand the full scope of claims they are waiving. They should also be aware of any state-specific exceptions that may apply. It is advisable to consult with an attorney to fully understand the implications of signing such a release.