Is the Desi District General Release signed when purchasing a franchise?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
[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.
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.
Representations and Acknowledgments.** Releasor represents and warrants that: (i) Releasor is the sole owner of all Claims, and that no Releasing Party has assigned or transferred, or purported to assign or transfer, to any person or entity, any Claim; (ii) Releasor has full power and authority to sign this Release; and (iii) this Release has been voluntarily and knowingly signed after Releasor has had the opportunity to consult with counsel of Releasor's choice.
Releasor acknowledges that the release in Section 1 is a complete defense to any Claim.
- **4.
Miscellaneous.** If any of the provisions of this Release are held invalid for any reason, the remainder of this Release will not be affected and will remain in full force and effect.
In the event of any dispute concerning this Release, the dispute resolution, governing law, and venue provisions of the Franchise Agreement shall apply.
Releasor agrees to take any actions and sign any documents that Desi District Franchise Group reasonably requests to effectuate the purposes of this Release.
This Release contains the entire agreement of the parties concerning the subject matter hereof.
This Release shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
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 is not signed when initially purchasing a franchise. The document states that the standard form of General Release is typically used in circumstances such as a franchise renewal or as a condition for approving the sale of an existing franchise.
The General Release, when required, is executed by the franchisee (referred to as the "Releasor") in favor of Desi District Franchise Group, LLC. It involves the franchisee releasing Desi District from any and all claims, causes of action, and liabilities arising out of events that occurred through the date of the release, including those related to the Franchise Agreement.
Furthermore, the franchisee agrees not to initiate any legal proceedings against Desi District. The franchisee also represents that they have the authority to sign the release and have had the opportunity to consult with legal counsel. This release contains the entire agreement between the parties concerning the subject matter, but it does not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
Prospective franchisees should be aware that while the General Release is not a standard part of the initial franchise purchase, it may become relevant later on, particularly during renewal or sale scenarios. Understanding the implications of such a release is crucial, and seeking legal advice before signing any such document is always recommended.