Under what circumstances is a waiver and release of claims required by Hck Hot Chicken?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
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- Release- Franchisee and all of Franchisee's guarantors, members, officers, directors, employees, agents, successors, assigns and affiliates fully and finally release and forever discharge Releasee, its past and present agents, employees, officers, directors, members, Franchisees, successors, assigns and affiliates (collectively "Released Parties") from any and all claims, actions, causes of action, contractual rights, demands, damages, costs, loss of services, expenses and compensation which Franchisee could assert against Released Parties or any of them up through and including the date of this Release.
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- THIS IS A SPECIFIC RELEASE GIVING UP ALL RIGHTS WITH RESPECT TO THE TRANSACTIONS OR OCCURRENCES THAT ARE BEING RELEASED UNDER THIS AGREEMENT.
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- California Releasor- You represent and warrant that YOU EXPRESSLY WAIVE ANY AND ALL RIGHTS AND BENEFITS UNDER CALIFORNIA CIVIL CODE §1542, which provides as follows:
A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.
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- The above Release shall not apply to any liabilities arising under the California Franchise Investment Law, the California Franchise Relations Act, Indiana Code § 23-2-2.5.1 through 23-2-2.7-7, the Maryland Franchise Registration and Disclosure Law, Michigan Franchise Investment Law, Minnesota Franchise Act, North Dakota franchise laws, the Rhode Island Investment Act, and the Washington Franchise Investment Protection Act and the rules adopted thereunder.
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- Releasor agrees to comply with all of its applicable post-termination or post-transfer obligations (as
the case may be) in the Franchise Agreement described above.
[Item 22: CONTRACTS]
- 7. Covenants Reasonable. You acknowledge and agree that: (i) the terms of this Agreement are reasonable both in time and in scope of geographic area; and (ii) you have sufficient resources and business experience and opportunities to earn an adequate living while complying with the terms of this Agreement. YOU HEREBY WAIVE ANY RIGHT TO CHALLENGE THE TERMS OF THIS AGREEMENT AS BEING OVERLY BROAD, UNREASONABLE, OR OTHERWISE UNENFORCEABLE.
- 8. Breach. You agree that failure to comply with the terms of this Agreement will cause substantial and irreparable damage to us and/or other HCK Hot Chicken franchisees for which there is no adequate remedy at law. Therefore, you agree that any violation of the terms of this Agreement will entitle us to injunctive relief. You agree that we may apply for such injunctive relief without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of yours in the event of the entry of such injunction will be the dissolution of such injunction, if warranted, upon hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, the parties agree that the amount of the bond shall not exceed $1,000. None of the remedies available to us under this Agreement are exclusive of any other, but may be combined with others under this Agreement, or at law or in equity, including injunctive relief, specific performance, and recovery of monetary damages. Any claim, defense, or cause of action that you may have against us, our owners or our affiliates, or against Franchisee, regardless of cause or origin, cannot be used as a defense against our enforcement of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 54–55)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, franchisees and related parties are required to sign a general release agreement, waiving certain claims against Hck Hot Chicken and its affiliates. This release covers a broad range of potential claims, including those related to contracts, damages, and loss of services, up to the date of the release. This means that upon signing the release, the franchisee gives up the right to sue Hck Hot Chicken for any known or unknown issues that occurred before the release date, with some exceptions.
However, the release does not apply to liabilities arising under specific state franchise laws, including those in California, Indiana, Maryland, Michigan, Minnesota, North Dakota, Rhode Island, and Washington. This ensures that franchisees retain their rights under these state laws, which are designed to protect franchisees. Additionally, the franchisee must still comply with post-termination or post-transfer obligations as outlined in the Franchise Agreement, even after signing the release.
Furthermore, managers or officers of an Hck Hot Chicken franchise may be required to sign a System Protection Agreement and a Confidentiality Agreement. These agreements include clauses where the individual waives the right to challenge the terms as overly broad or unenforceable. They also agree that failure to comply with the terms will cause irreparable damage to Hck Hot Chicken, potentially leading to injunctive relief. The individual also waives any claims for damages resulting from the wrongful issuance of an injunction, with a bond amount not exceeding $1,000 if a bond is required by the court.