factual

Does the release in the Itan franchise agreement cover claims arising from the sale of the franchise?

Itan Franchise · 2025 FDD

Answer from 2025 FDD Document

    1. 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.
    1. California Law. You and Owner hereby express your intention to release all existing claims, whether known or unknown, against the Franchisor Parties. Accordingly, you and Owner hereby waive §1542 of the California Civil Code, which provides the following:
    • "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor."

[Section 2 only applies for California franchisees; otherwise it is omitted]

  1. Washington Franchise Law. The General Release does not apply with respect to claims arising under the Washington Franchise Investment Protection Act, RCW 19.100, or the rules adopted thereunder.

[Section 3 only applies for Washington franchisees; otherwise it is omitted]

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 general release that covers claims related to the sale of the franchise. The release requires the franchisee and related parties to discharge Itan and its affiliates from any claims or liabilities arising from the execution, performance, or lack thereof, of the franchise agreement. This also includes the offer, sale, or acceptance of the franchise, including any related disclosures and representations.

However, this general release does not apply to obligations contained within the franchise agreement itself. Furthermore, the FDD states that for franchisees in Washington, the general release does not apply to claims arising under the Washington Franchise Investment Protection Act.

For franchisees in Maryland, the general release required as a condition of renewal, sale, and/or assignment/transfer does not apply to any liability under the Maryland Franchise Registration and Disclosure Law. Additionally, franchisees in Maryland have the right to bring a lawsuit in Maryland for claims arising under the Maryland Franchise Law, and any such claims must be brought within three years after the grant of the franchise.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.