What release must the franchisee and each owner execute when transferring a Dryer Vent Squad franchise?

According to the 2024 Dryer Vent Squad Franchise Disclosure Document, when transferring a franchise, the franchisee and each owner must execute a General Release. This release, attached as Exhibit 6 to the Franchise Agreement, absolves Dryer Vent Squad, its affiliates, and its past and present officers, directors, shareholders, members, partners, agents, representatives, independent contractors, servants, and employees from any and all claims related to matters arising on or before the effective date of the transfer.

This requirement means that as a condition of transferring the franchise, the franchisee gives up the right to sue Dryer Vent Squad for any past issues. This is a significant consideration for a prospective franchisee, as it limits their legal recourse against the franchisor. The transferee must also adhere to several other conditions, including satisfying all outstanding obligations to Dryer Vent Squad and ensuring that they are not in default or material breach of the Franchise Agreement.

In addition to the General Release, the transferee must also be bound by all the terms and conditions of the existing Franchise Agreement. Each owner of the transferee must personally execute the Franchise Owner Agreement and Individual Guaranty, which is included as Exhibit 1 to the agreement. The franchisor may also require the transferee to execute the then-current standard form franchise agreement offered to new franchisees, which may supersede the original agreement, provided that the financial obligations remain the same.

It is important to note that the Maryland FDD Amendment provides an exception to the general release, stating that it does not apply to any liability under the Maryland Franchise Registration and Disclosure Law. This means that franchisees in Maryland retain their rights under that specific law, despite the general release required for the transfer.