Does City Publications' consent to a transfer waive any claims against the transferor?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under California Franchise Investment Law and California Franchise Relations Act.
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor.
Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under The Rhode Island Franchise Investment Act.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to the 2025 City Publications Franchise Disclosure Document, the franchise agreement requires franchisees in certain states to sign a general release as a condition of transfer. However, these releases do not waive all claims. For example, in California and Rhode Island, the release specifically excludes claims arising under their respective franchise laws. Similarly, in Virginia, no statement signed by a franchisee can waive claims under state franchise law or disclaim reliance on statements made by City Publications.
For a prospective City Publications franchisee, this means that while a general release may be required during a transfer, its scope is limited by state laws designed to protect franchisees. The specific protections vary by state, so it's crucial to understand the laws applicable to your franchise location. This ensures that franchisees are not unknowingly giving up important legal rights when transferring their franchise.
It is important to note that the FDD includes addenda for several states that address how the franchise agreement interacts with state-specific franchise laws. These addenda often modify or supersede terms in the standard franchise agreement to comply with local regulations. Franchisees should carefully review any state-specific addenda to understand their rights and obligations in their particular state. Prospective franchisees should consult with an attorney to fully understand the implications of any release or waiver required by City Publications during a transfer, especially concerning rights under franchise laws.