What is the effect of the release on the ability of Chicken Guy franchisees to assert a claim?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer (on behalf of itself and its parent, subsidiaries and affiliates and their respective past and present members, officers, directors, shareholders, agents and employees, in their corporate and individual capacities), all individuals who execute this Agreement and all guarantors of Developer's obligations under this Agreement (collectively "Releasors"), freely and without any influence, forever release and covenant not to sue Chicken Guy, its parent, subsidiaries and affiliates and their respective past and present officers, directors, shareholders, agents and employees (collectively "Releasees"), in their corporate and individual capacities, from any and all claims, demands, liabilities and causes of action of whatever kind or nature, whether known or unknown, vested or contingent, suspected or unsuspected (collectively "claims"), that any Releasor now owns or holds, or may at any time have owned or held, up to and including the date of this Agreement, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, claims for contribution, indemnity and/or subrogation, and claims arising out of, or relating to this Agreement and all other agreements between any Releasor and any Releasee, the sale of a franchise to any Releasor, the development of any Franchised Restaurant and the development and operation of all other restaurants operated by any Releasor that are franchised by any Releasee. Notwithstanding any provision to the contrary in this Section 11, this General Release does not release any claims arising from representations made in Chicken Guy's Franchise Disclosure Document or its exhibits or otherwise impair or affect any claims arising after the date of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the general release requires the franchisee (referred to as 'Releasors') to release and covenant not to sue Chicken Guy (referred to as 'Releasees') and its affiliates from all claims and liabilities. This release covers all types of claims, whether known or unknown, vested or contingent, that the franchisee may have against Chicken Guy up to the date of the agreement. This includes claims arising from federal, state, and local laws, as well as claims related to the franchise agreement itself, the sale of the franchise, and the development and operation of the franchised restaurant.
However, the release does have limitations. It specifically states that it does not release claims arising from representations made in Chicken Guy's Franchise Disclosure Document (FDD) or its exhibits. Additionally, the release does not impair or affect any claims that arise after the date of the agreement. This means that a franchisee can still bring claims against Chicken Guy for issues that occur after the agreement is signed, and for misrepresentations in the FDD.
In practical terms, this means a prospective Chicken Guy franchisee should carefully review the FDD and any related documents before signing the franchise agreement. They should also be aware that they are giving up their right to sue Chicken Guy for any issues that occurred before the agreement, except for claims related to misrepresentations in the FDD. It is advisable for potential franchisees to seek legal counsel to fully understand the implications of this general release before signing the agreement.
This type of general release is common in franchise agreements. It aims to protect the franchisor from past liabilities and ensure a clean slate going forward. However, franchisees should be aware of their rights and the limitations of the release to make informed decisions.