Does the release required for Closet Storage Concepts franchise renewal cover all liabilities?
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, franchisees must execute a release of claims against Closet Storage Concepts and its affiliates as a condition for renewal. This release covers any and all claims arising from the franchise agreement or related agreements. However, the release does not extend to liabilities specifically protected by any applicable state statute regulating franchising.
The release's specific language and form will be determined by Closet Storage Concepts. A current form of release is included as Exhibit "5" to the franchise agreement. This means that a franchisee, upon renewal, gives up their right to sue Closet Storage Concepts for most issues related to the franchise, except where state law explicitly prevents such a release.
This requirement is fairly standard in franchising, as it aims to prevent future litigation between the franchisee and franchisor over past issues. Prospective franchisees should carefully review Exhibit "5" and understand what rights they are waiving before signing the franchise agreement. They may also want to consult with an attorney to fully understand the implications of this release, especially in the context of state franchise laws.