factual

What are Chicken Guy franchisees and guarantors prohibited from doing with respect to claims released?

Chicken_Guy Franchise · 2025 FDD

Answer 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.

  • (5) Developer, all individuals who executed this Agreement and all guarantors of Developer's obligations must execute a general release and a covenant not to sue, in a form satisfactory to Chicken Guy, of any and all claims against Chicken Guy and its affiliates and their respective past and present officers, directors, shareholders, agents and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and claims arising out of, or relating to, this Agreement and any other agreements between Developer and Chicken Guy or its affiliates and all other restaurants operated by Developer that are franchised by Chicken Guy or its affiliates.

Source: Item 23 — RECEIPTS (FDD pages 50–286)

What This Means (2025 FDD)

According to Chicken Guy's 2025 Franchise Disclosure Document, franchisees (referred to as 'Developers') and their guarantors agree to a general release and covenant not to sue Chicken Guy and its affiliates under certain conditions. This means they are prohibited from initiating lawsuits or making claims against Chicken Guy, its parent company, subsidiaries, affiliates, and their respective personnel. This release covers a broad range of potential claims, whether known or unknown, that the franchisee or guarantor may have held up to the date of the franchise agreement. This includes claims arising from federal, state, and local laws, as well as claims related to contribution, indemnity, subrogation, the franchise agreement itself, the sale of the franchise, and the development and operation of the franchised restaurant.

However, the release does not apply to claims arising from misrepresentations made in Chicken Guy's Franchise Disclosure Document (FDD) or its exhibits. It also does not impair or affect any claims arising after the date of the agreement. This ensures that franchisees retain their rights to address issues stemming from inaccurate information provided by Chicken Guy in the FDD or any issues that occur during the ongoing franchise relationship after the agreement is signed.

In the context of transferring the franchise, Chicken Guy requires that franchisees, individuals who executed the agreement, and all guarantors execute a general release and covenant not to sue. This release must be in a form satisfactory to Chicken Guy, covering any and all claims against Chicken Guy and its affiliates, including those arising from federal, state, and local laws, rules, and ordinances, as well as claims related to the agreement itself and other agreements between the franchisee and Chicken Guy. This requirement ensures that Chicken Guy is protected from potential legal claims when a franchise is transferred to a new owner.

This type of general release and covenant not to sue is a common practice in franchising, designed to protect the franchisor from potential liabilities and legal disputes. Prospective Chicken Guy franchisees should carefully review the scope of the release and understand their rights and obligations before signing the franchise agreement. It is advisable to consult with an attorney to fully understand the implications of this clause and ensure that their interests are adequately protected.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.