Does the release in the Itan franchise agreement cover claims arising from the execution of the Franchise Agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 execution of the Franchise Agreement. The release states 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 (or lack thereof) of the Franchise Agreement or the offer, sale, or acceptance of the franchise related thereto. However, this release does not apply to any obligations contained within the Franchise Agreement itself.
For a prospective Itan franchisee, this means that by signing the franchise agreement, they are waiving their rights to sue Itan for any claims related to the franchise agreement's execution, performance, or the offer and sale of the franchise. This includes claims based on disclosures and representations made during the franchise sales process. It is important to note that this release does not cover the obligations outlined within the franchise agreement itself, meaning Itan can still be held liable for failing to meet its contractual obligations.
It is also important to note that there are some state-specific exceptions to this general release. For example, the release does not apply to claims arising under the Washington Franchise Investment Protection Act for franchisees in Washington. Similarly, for franchisees in Maryland, the release does not apply to any liability under the Maryland Franchise Registration and Disclosure Law. Prospective franchisees should carefully review these state-specific provisions and consult with an attorney to understand the full scope of the release and its implications for their specific situation.
Furthermore, the Itan franchise agreement includes a clause where franchisees agree not to disparage the franchisor. This means franchisees cannot make false representations of facts or defame, discredit, or deprecate any of the franchisor parties. This obligation extends to all methods of communication, including statements made online or through social media. This clause could further limit a franchisee's ability to voice concerns or complaints about Itan, even if they believe they have been wronged.