In the context of the release, who are considered the 'Releasing Parties' for a Jersey Mikes franchise?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- F.
Each of the Releasing Parties acknowledges that he, she or it is familiar with Section 1542 of the California Civil Code, which reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITO® 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.
With respect to those claims being released hereunder, each of the parties acknowledges that he, she or it is releasing unknown claims and waives all rights he, she or it has or may have under California Civil Code Section 1542 or any other statute or common law principle of similar effect. Each of the parties acknowledges that he, she or it may hereafter discover claims or facts in addition to or different from those now known or believed to exist with respect to the subject matter of the claims being released hereunder, and which, if known or suspected at the time of entering into this Release, may have materially affected this Release. Nevertheless, each of the parties hereby waives any right, claim or cause of action that might arise as a result of such different or additional claims or facts. Each of the parties acknowledges and understands the significance and consequence of such release and such specific waiver of California Civil Code Section 1542.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes' 2025 Franchise Disclosure Document, the 'Releasing Parties' in the context of a general release include each individual or entity involved, acknowledging they are familiar with California Civil Code Section 1542. This section stipulates that a general release does not cover claims the releasing party is unaware of, which, if known, would significantly affect their settlement.
Jersey Mikes requires that each party acknowledges they are releasing unknown claims and waiving rights under California Civil Code Section 1542 or similar laws. This means franchisees are giving up the ability to pursue claims they might discover later, even if those claims could have changed their decision to enter the release agreement.
Furthermore, the FDD states that each party must acknowledge they may discover additional claims or facts that could materially affect the release. Despite this possibility, they still waive any right to pursue actions based on these new discoveries. This highlights the importance of understanding the implications of the release and potentially consulting with a lawyer, as mentioned in the FDD, before signing, to fully grasp the rights being waived. The release is to be construed under New Jersey law, excluding its conflict of law rules, and disputes will be resolved according to the procedures in the Franchise Agreement(s).