Under what circumstances might Checkersrallys require a franchisee to sign a general release?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
You must sign a general release if you renew or transfer your franchise.
California Corporations Code § 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code §§ 31000 through 31516).
Business and Professions Code § 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code §§ 20000 through 20043).
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, a franchisee is required to sign a general release when renewing or transferring their franchise. This means that as a condition of either extending the franchise agreement for another term or selling the franchise to a new owner, Checkersrallys mandates that the franchisee execute a release. This release likely covers any potential claims or liabilities the franchisee might have against Checkersrallys up to that point.
However, the FDD also notes some important limitations and exceptions to this requirement, particularly for franchisees in certain states. For example, in California, the Franchise Investment Law and the Franchise Relations Act void any waiver of rights by the franchisee. Similarly, in Maryland, any general releases signed will not apply to the extent prohibited by the Maryland Franchise Registration and Disclosure Law. These state-specific regulations aim to protect franchisees from unknowingly relinquishing their legal rights.
Furthermore, Minnesota law prohibits Checkersrallys from requiring a franchisee to sign a general release. For Area Franchisees, the agreement includes a release where they discharge Checkersrallys from any claims before the agreement date. This release extends to the Area Franchisee's affiliates, shareholders, directors, officers, members, managers, employees, successors, and assigns. However, this release does not waive reliance on any representation Checkersrallys made in their Franchise Disclosure Document.
Prospective franchisees should be aware of these conditions and understand the implications of signing a general release. It is advisable to consult with legal counsel to fully understand the scope and impact of such a release, especially considering the specific laws of the state in which the franchise will operate. This will ensure that the franchisee is not unknowingly waiving any rights or claims they may have against Checkersrallys.