Does the Desi District General Release prevent a franchisee from initiating a lawsuit against Desi District?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
commercial symbols, provided that Franchisor will be liable to Landlord for any damage Franchisor or its designee causes by such removal.
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- No Liability. By executing this Rider, Franchisor does not assume any liability with respect to the Leased Premises or any obligation as Tenant under the Lease.
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EXHIBIT E
FORM OF GENERAL RELEASE
[This is our current standard form of General Release. This document is not signed when you purchase a franchise. In circumstances such as a renewal of your franchise or as a condition of our approval of a sale of your franchise, we may require you to sign a general release.]
This General Release ("Release") is executed by the undersigned ("Releasor") in favor of Desi District Franchise Group, LLC, a Delaware Limited Liability Company ("Desi District Franchise Group").
Background Statement: [describe circumstances of Release]
Releasor agrees as follows:
- 1. Release. Releasor (on behalf of itself and its parents, subsidiaries and affiliates and their respective past and present officers, directors, shareholders, managers, members, partners, agents, and employees (collectively, the "Releasing Parties")) hereby releases Desi District Franchise Group, its affiliates, and their respective directors, officers, shareholders, employees, and agents (collectively, the "Released Parties") from any and all claims, causes of action, suits, debts, agreements, promises, demands, liabilities, contractual rights and/or obligations, of whatever nature, known or unknown, which any Releasing Party now has or ever had against any Released Party based upon and/or arising out of events that occurred through the date hereof, including without limitation, anything arising out of the Franchise Agreement (collectively, "Claims").
- **2.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the General Release includes a covenant not to sue, which, under normal circumstances, prevents a franchisee from initiating a lawsuit against Desi District. The General Release is Desi District's current standard form, but it is typically not signed when purchasing a franchise. However, Desi District may require a franchisee to sign it upon renewal of the franchise or as a condition for approving the sale of the franchise.
The General Release requires the franchisee (Releasor), on behalf of themselves and related parties, to release Desi District Franchise Group and its affiliates from all claims and liabilities arising from events up to the date of the release, including those related to the Franchise Agreement. Furthermore, the franchisee agrees not to initiate or participate in any legal proceedings against Desi District regarding any released claim. The franchisee also acknowledges that this release serves as a complete defense against any claim.
However, there are exceptions and limitations to this release. For instance, the release does not apply to liabilities under the Maryland Franchise Registration and Disclosure Law, as stated in the Maryland Rider. Similarly, the New York Rider specifies that franchisees are not required to waive compliance by Desi District with any provision of New York General Business Law. The Washington Addendum also indicates that a release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. These state-specific riders modify the general release to comply with local franchise laws, providing some protection for franchisees.
Prospective franchisees should carefully review these riders and consult with legal counsel to understand the full scope and limitations of the General Release in their specific state. They should also be aware that the enforceability of certain provisions, such as limitations on the statute of limitations, may be restricted by state laws. Franchisees need to understand under which circumstances they might be asked to sign a General Release and what rights they would be waiving.