When transferring a Chem Dry franchise, is a general release required, and who must sign it?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
all of those contained in this Agreement, including without limitation, increased or additional fees and new product or service offerings as Required Services or Additional Services. At the time FRANCHISEE signs the renewal franchise agreement, FRANCHISEE will pay CDI a renewal fee as set forth on the Summary Page of this Agreement.
C. AGREEMENTS/RELEASE
If CDI grants a renewal franchise, CDI and FRANCHISEE and the owner(s) of FRANCHISEE shall execute CDI's then current form of franchise agreement and such ancillary agreements as are used in offering franchises for the ownership and operation of CHEM-DRY Businesses (with appropriate modifications to reflect the fact that the agreements relate to the grant of a renewal franchise; including but not limited to, that FRANCHISEE shall not have a right to obtain a renewal franchise beyond the renewal term), and FRANCHISEE and its owner(s) shall execute a general release, in a form satisfactory to CDI, releasing, to the extent permitted by applicable law, any and all claims against CDI and its respective affiliates, shareholders, officers, directors, employees and agents. Failure by FRANCHISEE and its Owner(s) to sign such agreement(s) and release by the earlier of thirty (30) days before expiration of the Term or ninety (90) days after delivery thereof to FRANCHISEE shall be deemed an election by FRANCHISEE not to acquire a renewal franchise.
15. TERMINATION OF FRANCHISE
A. IMMEDIATE TERMINATION
CDI may terminate this Agreement, effective immediately, if:
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, when granting a renewal franchise, Chem Dry requires a general release. This release must be signed by the franchisee and the owner(s) of the franchisee. The release must be in a form satisfactory to Chem Dry and releases any and all claims against Chem Dry and its affiliates, shareholders, officers, directors, employees, and agents, to the extent permitted by law.
Failure to sign the required agreements and release by the earlier of 30 days before the expiration of the term or 90 days after delivery to the franchisee will be deemed as an election by the franchisee to not acquire a renewal franchise. This means that if a franchisee and its owners do not complete the necessary paperwork and release forms within the specified timeframe, they will lose the opportunity to renew their Chem Dry franchise.
It's important to note that the document also mentions that California Corporations Code 31512 voids a waiver of rights under the Franchise Investment Law and Business and Professions Code 20010 voids a waiver of rights under the Franchise Relations Act. This suggests that while a general release may be required, certain rights cannot be waived under California law. Prospective franchisees should consult with legal counsel to understand the full implications of signing a general release, especially in light of state-specific protections.