Under what circumstances must a Fitstop franchisee sign a general release of claims?

According to Fitstop's 2024 Franchise Disclosure Document, a franchisee must sign a general release of claims if they renew or transfer their franchise. This requirement means that as a condition of either extending the franchise agreement for another term or selling the franchise to a new owner, the franchisee must waive any existing or potential legal claims they may have against Fitstop.

This requirement has significant implications for prospective franchisees. By signing a general release, the franchisee gives up their right to sue Fitstop for any past actions or omissions, even if those actions later cause damages. This could include claims related to misrepresentation, breach of contract, or other potential grievances. The franchisee should carefully consider the implications of this waiver and consult with an attorney before signing it.

However, the FDD also notes some protections for franchisees under California law. Specifically, California Corporations Code Section 31512 voids any waiver of rights under the Franchise Investment Law and Business and Professions Code Section 20010 voids any waiver of rights under the Franchise Relations Act. Additionally, California law prohibits Fitstop from disclaiming representations made to a prospective franchisee or denying reliance on those representations in any franchise document. If any provision in the Franchise Disclosure Document or Franchise Agreement is inconsistent with the law, the law will take precedence.