What is the effect of the Floyds 99 General Release on future claims that may be discovered?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
onship, from the beginning of time until the date of this Amendment. In addition, to the extent California or South Dakota law applies to this Release, the Franchisee, on behalf of itself and Franchisee Affiliates, agrees as follows:
- (a) Release of Unknown Claims and Waiver of California Law. Franchisee and Franchisee Affiliates acknowledge that they are aware and informed that the laws of California may purport to limit or reduce the effect of a general release with respect to claims not known or suspected by them at the time of execution of the release, such as Section 1542 of the Civil Code of the State of California, which provides as follows:
"A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release which, if known by him, must have materially affected his or her settlement with the debtor."
Franchisee and Franchisee Affiliates waive and relinquish every right or benefit which they have, or may have, under Section 1542 of the Civil Code of the State of California, and under any similar provisions of any other law (as may be applicable to this Amendment), to the fullest extent that Franchisee and Franchisee Affiliates may lawfully waive such right or benefit pertaining to the subject matter of this Amendment. In connection with such waiver and relinquishment, with respect to the Released Claims, Franchisee and Franchisee Affiliates acknowledge that they are aware and informed that they may hereafter discover facts in addition to or different from those that they now know or believe to be true with respect to the subject matter of this Amendment, but that it is Franchisee's and Franchisee Affiliates' intention to settle and release fully, and finally and forever, all Released Claims, disputes and differences, known or unknown, suspected or unsuspected, which now exist, may exist or heretofore existed, and in furtherance of such intention, the release given herein shall be and remain in effect as a full and complete release, notwithstanding the discovery or existence of any such additional or different facts that would have affected the release of all Released Claims. Franchisee and Franchisee Affiliates agree to defend, indemnify and hold harmless Franchisor and Franchisor Affiliates from any and all Released Claims arising out of, directly or indirectly, the assertion by Franchisee and Franchisee Affiliates (or any person or entity by, through, or on their behalf) of any Released Claims, positions, defenses, or arguments contrary to this Section 7(a) of this Amendment.
(b) Release of Unknown Claims and Waiver of South Dakota Law.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the General Release includes a waiver of rights regarding claims that may be discovered in the future. Specifically, franchisees waive rights under Section 1542 of the California Civil Code or similar laws, agreeing that the release remains effective even if new facts are discovered that might have affected the release of claims. This means a franchisee gives up the right to pursue claims they don't currently know about. Franchisees also agree to defend and indemnify Floyds 99 against any claims made contrary to this section of the release.
However, this release has some limitations. For instance, the FDD states that a general release typically does not apply to claims the creditor is unaware of at the time of signing, if knowing about them would have significantly altered the settlement. Furthermore, the addenda for specific states like Indiana, Maryland, and Washington provide additional protections. In Indiana, releases signed will not apply to claims arising under the Indiana Franchise Disclosure Law and the Indiana Deceptive Practices Act. In Maryland, the general release does not apply to any liability under the Maryland Franchise Registration and Disclosure Law. In Washington, the release does not apply to any claims under the Washington Franchise Investment Protection Act.
These stipulations mean that while Floyds 99 aims to create a comprehensive release, franchisees retain certain rights and protections under specific state laws. Prospective franchisees should carefully review the General Release and any state-specific addenda with legal counsel to fully understand the scope and limitations of the release, and how it affects their rights and potential future claims. This is especially important if the franchisee is considering transferring their franchise agreement, ownership, or assets, or entering into a successor agreement, as the release is often required in these scenarios.