Under what circumstances is a City Publications franchisee exempt from executing a general release for renewal?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
de §§31000-31516 and the California Franchise Relations Act, Cal. Bus. And Prof. Code §§20000-20043, the Franchise Agreement for CITY PUBLICATIONS FRANCHISE GROUP, INC. shall be amended as follows:
- The California Franchise Relations Act provides rights to the Franchise concerning termination or nonrenewal of the Franchise Agreement, which may supersede provisions in the Franchise Agreement, specifically Sections 5.B and 19.
- 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.
- Section 17A of the Franchise Agreement contains a covenant not to compete which extends beyond the expiration or termination of the Franchise Agreement; this covenant may not be enforceable under California law.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, a franchisee's obligation to sign a general release as a condition of renewal is waived under specific circumstances in certain states. In California, the release shall exclude claims arising under the California Franchise Investment Law and the California Franchise Relations Act. Similarly, in Maryland, the release excludes claims arising under the Maryland Franchise Registration and Disclosure Law.
In Rhode Island, any general release required as a condition of renewal or transfer will be void with respect to claims under The Rhode Island Franchise Investment Act. Furthermore, the Washington Addendum specifies that a release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel.
These exemptions and limitations are designed to protect franchisees' rights under state franchise laws, ensuring they are not forced to waive those rights to renew or transfer their franchise. Prospective City Publications franchisees should carefully review the addenda applicable to their state and consult with legal counsel to understand the full scope of their rights and obligations.