In the Dq Treat sample release, what is the significance of Section 3 regarding the release of claims?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Release of Claims by Licensee. In consideration of the terms and conditions of this Release, the receipt and sufficiency of which is hereby acknowledged, Licensee, its heirs, successors and assigns, affiliates, directors, officers, shareholders, and any other party claiming an interest through them (the "Licensee Parties"), release and forever discharge the Company, its predecessors, successors, assigns, affiliates, directors, officers, shareholders, and employees (the "Company Parties") from any and all claims, debts, liabilities, demands, obligations, costs, expenses, actions and causes of action, whether known or unknown, vested or contingent, which Licensee Parties may now or in the future own or hold, that in any way relate to the Operating Agreement (collectively, "Claims"), for known or unknown damages or other losses including, any alleged violations of any deceptive or unfair trade practices laws, franchise laws, or other local, municipal, state, federal, or other laws, statutes, rules or regulations, or any alleged violations of the Operating Agreement or any other related agreement between Licensee and Company.
The Licensee Parties do not release the Company Parties from any obligations arising under this Release. The Licensee Parties and the Company Parties acknowledge that the release set forth in this Section does not release Company Parties from any liability under the Maryland Franchise Registration and Disclosure Law.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, Section 3 of the sample release agreement outlines the 'Release of Claims by Licensee.' This section is significant because it stipulates that the franchisee (Licensee), along with their heirs, successors, assigns, affiliates, directors, officers, shareholders, and any other party claiming an interest through them, releases and forever discharges Dq Treat (the Company), along with its predecessors, successors, assigns, affiliates, directors, officers, shareholders, and employees, from any and all claims related to the Operating Agreement. This release covers all possible claims, debts, liabilities, demands, obligations, costs, expenses, actions, and causes of action, whether known or unknown, vested or contingent.
In practical terms, this means that by signing the release, a Dq Treat franchisee gives up the right to sue Dq Treat for any reason related to the franchise agreement, including alleged violations of deceptive trade practices, franchise laws, or any other laws or regulations. The release extends to damages or other losses, whether known or unknown at the time of signing. However, the Licensee Parties do not release the Company Parties from any obligations arising under this Release, and the release does not cover any liability under the Maryland Franchise Registration and Disclosure Law.
This type of release is common in franchise agreements, particularly when a franchisee transfers their franchise to a new owner. It aims to protect the franchisor from potential future claims arising from the franchisee's operation of the business. However, prospective franchisees should carefully review this section with legal counsel to fully understand the scope of the release and its implications for their rights. The FDD also notes specific state addenda, such as for Minnesota, Virginia, and Rhode Island, which may impose additional restrictions or protections regarding such releases, so franchisees need to be aware of the specific regulations in their state.