Does the release against Desi District cover claims arising after the date of the release?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
nchise. 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.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
According to the 2024 Desi District Franchise Disclosure Document, the general release covers claims up to the date of the release. Specifically, the release applies to any claims that the franchisee (Releasor) has against Desi District Franchise Group (Released Parties) that are based upon events that occurred through the date of the release. This includes, but is not limited to, anything arising out of the Franchise Agreement.
This means that a franchisee signing the release is giving up their right to sue Desi District for any known or unknown issues that have occurred up to that point. The franchisee also agrees not to initiate or participate in any legal proceedings against Desi District regarding these claims. This is further reinforced by the representation that the Releasor is the sole owner of all claims and has the full authority to sign the release.
However, the release explicitly does not apply to any liability under the Maryland Franchise Registration and Disclosure Law, as stated in the FDD. Additionally, the Washington Addendum notes 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.
It is important for a prospective Desi District franchisee to understand the implications of signing such a release. They should consult with an attorney to fully understand their rights and obligations before signing any documents, especially those that could waive their legal rights. Franchisees should also be aware of any state-specific exceptions or limitations to the release, such as those in Maryland and Washington.