Does the release against Desi District cover liabilities?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
as Tenant under the Lease.
Executed by:
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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. 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.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
According to the 2024 FDD, Desi District utilizes a General Release that may be required in certain circumstances, such as franchise renewal or the approval of a franchise sale. This release, if executed, has significant implications for a franchisee's rights and potential claims against Desi District. The release covers a broad spectrum of potential claims. Specifically, the Releasor (franchisee) releases Desi District Franchise Group 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. This includes anything arising out of the Franchise Agreement.
The release also includes a covenant not to sue, preventing the franchisee from initiating or participating in any legal proceedings against Desi District. The franchisee also acknowledges that the release serves as a complete defense against any claim. However, the release does not apply to any liability under the Maryland Franchise Registration and Disclosure Law, and a 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.
Several states, including Maryland, Minnesota, New York, Rhode Island, and Washington, have specific stipulations within their respective riders that modify the standard franchise agreement. For example, Maryland law specifies that releases, estoppels, or waivers of liability are not intended to act as a release of any liability incurred under the Maryland Franchise Law. New York law dictates that franchisees are not required to assent to releases or waivers that would relieve Desi District from any duty or liability imposed by New York General Business Law. These state-specific regulations highlight the importance of franchisees understanding their rights within their jurisdiction and seeking legal counsel to navigate these complex provisions.
Prospective franchisees should carefully review the General Release and any applicable state-specific riders with legal counsel to fully understand the scope of the release and its impact on their rights and potential liabilities. Understanding these provisions is crucial before signing any franchise agreement or related documents with Desi District.