What is the consequence if a Closet Storage Concepts franchisee does not execute the release of claims?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.4.3 Franchisee has executed a release of any and all claims against Franchisor and its parents, affiliates, and their equity owners, officers, directors, agents, employees, attorneys and accountants arising out of or related to this Agreement or any related agreement.
The release shall contain language and be of the form chosen by Franchisor, except the release shall not release any liability specifically provided for by any applicable state statute regulating franchising.
Our current form of release is attached to this Agreement as Exhibit "5".
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, a franchisee must execute a release of claims against Closet Storage Concepts and its affiliates as a condition for renewing their franchise agreement. This release covers any claims arising from the franchise agreement or related agreements.
Specifically, section 2.4.3 states that the franchisee must execute this release to exercise the renewal option. The release must be in a form chosen by Closet Storage Concepts, but it will not release any liability specifically provided for by any applicable state statute regulating franchising. Exhibit "5" of the Franchise Agreement contains the current form of release.
Therefore, if a Closet Storage Concepts franchisee fails to execute the release of claims, they will not be able to renew their franchise agreement. This requirement ensures that Closet Storage Concepts is protected from potential legal claims as the franchise relationship continues, and it is a standard practice in franchising to include such a release as part of the renewal process.