Does the general release agreement for Cream include a covenant not to sue the Franchisor Parties?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You and your owners, on your own behalf and the other Releasing Parties, further covenant not to sue any of the Franchisor Parties on any of the Claims released by this paragraph and represent that you have not assigned any of the Claims released by this paragraph to any individual or entity.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the general release agreement does include a covenant not to sue the Franchisor Parties. The agreement specifies that the franchisee and their owners agree not to sue any of the Franchisor Parties regarding any claims released within the agreement. This means that by signing the release, the franchisee gives up their right to bring legal action against Cream and related parties for any issues covered by the release.
This covenant not to sue is a significant legal commitment. It prevents franchisees from pursuing litigation against Cream, even if new information comes to light after signing the release. The release covers all claims, known or unknown, that the franchisee may have against Cream.
For franchisees in California or those who are California residents, the agreement includes a Section 1542 acknowledgment, addressing the waiver of unknown claims. This section requires franchisees to acknowledge they are giving up rights to claims they may not even be aware of. It also requires acknowledgement that the franchisee has consulted with legal counsel before executing the release and that they understand its meaning.
Prospective franchisees should carefully review the general release agreement with their legal counsel to fully understand the scope of the claims being released and the implications of the covenant not to sue. Understanding these terms is crucial before signing any franchise agreement with Cream.