What is the effect of the Franchisee's unconditional release of the Franchisor in the Floyds 99 General Release?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS GENERAL RELEASE ("Release") is made effective as of the day of, 20 by ("Franchisee") in favor of FLOYD'S 99 FRANCHISING, LLC, a Colorado limited liability company ("Franchisor") (collectively referred to as "Parties"). The Parties have entered into that certain Franchise Agreement dated ("Franchise Agreement") which governs the development and operation of a FLOYD'S 99 Barbershop ("FLOYD'S 99 Shop" or "Barbershop") (to the extent not otherwise defined herein, all initial-capitalized references shall have the same meaning as set forth in the Franchise Agreement). The Franchisee desires to transfer the Franchise Agreement, the ownership of the Franchisee, or the FLOYD'S 99 Shops or some or all of the assets of the Barbershop.
OR
The Franchisee desires to enter into a successor to the Franchise Agreement.
The Franchisor desires to consent to the Franchisee's request subject to the Franchisee's compliance with the terms and conditions set forth in the Franchise Agreement including, without limitation, the execution and delivery by the Franchisee to the Franchisor of this Release.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties hereby agree as follows:
In Items 17.c. and 17.m., any releases you sign will not apply to any claims that may arise under the Indiana Franchise Disclosure Law and the Indiana Deceptive Practices Act.
- b. Pursuant to the Code of Maryland Regulations (COMAR) 02.02.08.16L, the general release required as a condition of renewal, sale and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
- c. You may bring any cause of action against us in any court of competent jurisdiction, including the state or federal courts of Maryland.
- d. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
Any release executed in connection herewith will not apply to any claims that may arise under the Minnesota Franchise Act.
(c) [APPLIES ONLY IN WASHINGTON] Applicability Under Washington Law. Notwithstanding the foregoing, this Release shall not apply to any claims under the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder.
2. General. This Release shall be construed and enforced in accordance with, and governed by, the laws of the State of Colorado. This Release embodies the entire agreement and understanding between the Parties and supersedes all prior agreements and understandings relating to the subject matter hereof, and this Release may not be modified or amended or any term hereof waived or discharged except in writing signed by the party against whom such amendment, modification, waiver or discharge is sought to be enforced. Nothing in this Release is intended to disclaim any representations made by the Franchisor in the most recent franchise disclosure document provided by the Franchisor or its representatives to the Franchisee in connection with any successor to the Franchise Agreement. The headings are for convenience in reference only and shall not limit or otherwise affect the meaning hereof. This Release may be executed in any number of counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. If any provision of this Release shall be held by a court of competent jurisdiction to be invalid or unenforceable, such provision shall be deemed modified to eliminate the invalid or unenforceable element and, as so modified, such provision shall be deemed a part of this Release as though originally included. The remaining provisions of this Release shall not be affected by such modification. All provisions of this Release are binding and shall inure to the benefit of the Parties and their respective delegatees, successors and assigns.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 FDD, the General Release has varying effects depending on the state where the franchise operates. Generally, the release is required when a franchisee desires to transfer their Franchise Agreement, ownership, or assets, or when entering into a successor agreement. The franchisor's consent to these actions is contingent upon the franchisee executing and delivering the General Release.
However, certain states have addenda that limit the scope of this release to protect franchisees. For instance, in Indiana, releases signed by the franchisee do not apply to claims arising under the Indiana Franchise Disclosure Law and the Indiana Deceptive Practices Act. Similarly, in Maryland, the general release required for renewal, sale, or transfer does not apply to any liability under the Maryland Franchise Registration and Disclosure Law. Maryland franchisees also retain the right to bring causes of action in Maryland courts for claims under the Maryland Franchise Registration and Disclosure Law within three years of the franchise grant.
In Minnesota, any release executed will not apply to claims arising under the Minnesota Franchise Act. Furthermore, Minnesota law prohibits Floyds 99 from requiring litigation outside of Minnesota, waiving jury trials, or imposing liquidated damages or termination penalties that reduce a franchisee's rights under Minnesota Statutes, Chapter 80C. In Washington, the release does not apply to any claims under the Washington Franchise Investment Protection Act. These state-specific provisions ensure that franchisees retain certain rights and protections despite signing a general release, highlighting the importance of understanding the specific addenda applicable to their state.
The General Release itself is governed by Colorado law and represents the entire agreement between the parties, superseding prior agreements. It is designed to disclaim any representations made by Floyds 99 in the most recent franchise disclosure document. The release can be executed in multiple counterparts and remains effective even if some provisions are deemed invalid, with the remaining provisions still binding. This comprehensive approach underscores the importance of franchisees carefully reviewing the General Release and any state-specific addenda with legal counsel to fully understand their rights and obligations.