Are there any exceptions to the release of prior claims in the Ledgers Franchise Agreement?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
By executing this Agreement, the Franchisee, on behalf of yourselves and your heirs, legal representatives, successors and assigns, and each assignee of this Agreement, forever releases and discharges us, our past and present employees, agents, members, officers, and directors, including any of our parent, subsidiary and affiliated entities, their respective past and present employees, agents, members, officers, and directors, from any and all Claims arising prior to the date of this Agreement. However, this release does not apply to any Claim you may have arising from representations in our Franchise Disclosure Document.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the Franchise Agreement includes a release of prior claims, but with a specific exception. By signing the agreement, the franchisee releases Ledgers from any claims arising before the agreement's date. However, this release does not apply to claims resulting from representations made in Ledgers' Franchise Disclosure Document itself. This means a franchisee retains the right to pursue claims against Ledgers if they believe they were misled by information presented in the FDD.
This provision is fairly standard in franchise agreements. It aims to prevent franchisees from later suing the franchisor over issues that existed before the franchise agreement was signed. However, the exception for claims arising from the FDD is crucial. It protects the franchisee's right to rely on the accuracy and completeness of the information provided by Ledgers during the franchise sales process.
Prospective Ledgers franchisees should carefully review the Franchise Disclosure Document and note any discrepancies or concerns. If they believe Ledgers made misrepresentations in the FDD, they should seek legal advice before signing the Franchise Agreement. This clause ensures that franchisees are not waiving their rights to hold Ledgers accountable for the accuracy of its disclosures.
Additionally, the document states that acknowledgements 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. Also, a release or waiver of rights in the franchise agreement purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is void except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).