Does the Desi District General Release prevent a franchisee from participating in any administrative proceeding against Desi District?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Covenant Not to Sue.** Releasor (on behalf of all Releasing Parties) covenants not to initiate, prosecute, encourage, assist, or (except as required by law) participate in any civil, criminal, or administrative proceeding or investigation in any court, agency, or other forum, either affirmatively or by way of cross-claim, defense, or counterclaim, against any Released Party with respect to any Claim.
- **3.
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. This covenant requires the franchisee (Releasor), on behalf of themselves and related parties, to refrain from initiating, prosecuting, encouraging, assisting, or participating in any civil, criminal, or administrative proceeding or investigation against Desi District (Released Party). This applies across all forums, including courts and agencies, concerning any claim.
This means a Desi District franchisee signing the General Release agrees not to take part in any legal or administrative actions against the franchisor. This extends to not only initiating a lawsuit but also assisting or encouraging others in doing so. The only exception is if participation is required by law.
The General Release is Desi District's current standard form, but is not signed when purchasing a franchise. It may be required in circumstances such as a renewal of the franchise or as a condition of approval for a sale of the franchise.