Does the release in the Itan franchise agreement cover claims arising from the acceptance of the franchise?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Release. Owner, you, and each of your officers, directors, shareholders, members, owners, employees, agents, representatives, affiliates, parents, divisions, successors and assigns, and all persons or firms claiming by, through, under, or on behalf of any or all of them (the "Franchisee Parties"), hereby release, acquit and forever discharge us, any and all of our past and present affiliates, parents, subsidiaries and related companies, divisions and partnerships, consultants, advisors and franchise sellers and its and their respective past and present officers, directors, shareholders, members, owners, employees, agents, representatives, affiliates, parents, divisions, successors and assigns, and the spouses of such individuals (collectively, the "Franchisor Parties"), from any and all claims, liabilities, damages, expenses, actions or causes of action which any of the Franchisee Parties may now have or has ever had, whether known or unknown, past or present, absolute or contingent, suspected or unsuspected, of any nature whatsoever, directly or indirectly arising out of or relating to the execution and performance (or lack thereof) of the Franchise Agreement or the offer, sale or acceptance of the franchise related thereto (including, but not limited to any disclosures and representations made in connection therewith). The foregoing release shall not be construed to apply with respect to any obligations contained within this Agreement.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the franchise agreement includes a release that covers claims arising from the acceptance of the franchise. The release stipulates that the franchisee parties release the franchisor parties from any and all claims, liabilities, damages, expenses, actions, or causes of action, whether known or unknown, past or present, directly or indirectly arising out of or relating to the execution and performance of the Franchise Agreement or the offer, sale, or acceptance of the franchise. However, this release does not apply to obligations contained within the Franchise Agreement itself.
Notably, the FDD includes specific clauses addressing the applicability of this general release in certain states. For instance, the general release does not apply to claims arising under the Washington Franchise Investment Protection Act for franchisees in Washington. Similarly, for franchisees in Maryland, any representations requiring prospective franchisees to assent to a release, estoppel, or waiver of liability do not act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. The FDD also states that the State of Michigan prohibits certain unfair provisions that are sometimes in franchise documents. If any of the listed provisions are in these franchise documents, the provisions are void and cannot be enforced against you.
This means that prospective Itan franchisees should be aware of the broad scope of the release they are agreeing to, understanding that it covers claims related to the offer, sale, and acceptance of the franchise. However, franchisees should also note the exceptions and limitations to this release, particularly those related to specific state laws such as those in Washington, Maryland, Michigan, and Minnesota. It is crucial for potential franchisees to carefully review these provisions with legal counsel to fully understand their rights and obligations.