Does the general release and covenant not to sue for Even Hotels survive the termination of the license?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee and its respective heirs, representatives, successors and assigns, hereby release, remise and forever discharge IHG and its Affiliates and each of their directors, employees, agents, successors and assigns from any and all claims, whether known or unknown, of any kind or nature, absolute or contingent, if any there be, at law or in equity, from the beginning of time to, and including, the date of IHG's execution of this License, and Licensee and its respective heirs, representatives, successors and assigns do hereby covenant and agree that they will not institute any suit or action at law or otherwise against IHG, directly or indirectly relating to any claim released hereby by Licensee; provided, however, that nothing contained in this release is intended to disclaim or require Licensee to waive reliance on any representation that IHG made in the Franchise Disclosure Document that it provided to Licensee. This release and covenant not to sue shall survive the termination of this License. Licensee shall take whatever steps are necessary or appropriate to carry out the terms of this release and covenant not to sue upon IHG's request.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the general release and covenant not to sue does indeed survive the termination of the license agreement. This means that even after the franchise agreement ends, the franchisee is still bound by the terms of the release, preventing them from initiating any legal action against IHG (InterContinental Hotels Group) related to claims covered by the release. This provision is designed to protect IHG from potential future liabilities arising from the franchisee's operation of the Even Hotels business.
This survival clause has significant implications for prospective Even Hotels franchisees. It means that any claims a franchisee might have against IHG, from the beginning of time up to the date IHG executes the license, are waived and cannot be pursued after the agreement terminates. While the release does not require franchisees to waive reliance on any representation made by IHG in the Franchise Disclosure Document, franchisees should be diligent in understanding all aspects of the franchise agreement and any potential claims they might have before signing the agreement.
However, it's important to note that certain state laws may impact the enforceability of such releases. For example, amendments included in the FDD for franchisees in states like North Dakota, Hawaii, Maryland, and Washington stipulate that the general release language does not relieve IHG from liability imposed by the laws concerning franchising in those states. Therefore, franchisees should be aware of the specific laws in their state and how they might affect the general release and covenant not to sue. Prospective franchisees should consult with a legal professional to fully understand the implications of this clause and how it interacts with state-specific franchise laws.