Does the Management Recruiters franchise agreement specify that an assignment must be made without liability?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
- 28.4. The provisions of this Agreement relating to the execution of releases shall be subject to the then valid and applicable requirements of Indiana Code, Sec. 23‐2‐2.7‐1(5).
- 28.5. Subsections(5) and (10) of Indiana Code, Sec. 23‐2‐2.7‐1 currently provide:
It is unlawful for any franchise agreement entered into between any franchisor and a member who is either a resident of Indiana or a nonresident who will be operating a franchise in Indiana to contain any of the following provisions:
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to the 2024 Management Recruiters Franchise Disclosure Document, the franchise agreement's stipulations regarding releases and assignments are influenced by specific state laws, particularly in Indiana. The FDD includes an addendum that modifies the standard agreement to comply with Indiana Code Sec. 23-2-2.7-1(5), which prohibits franchise agreements from requiring a franchisee to prospectively agree to a release, assignment, or waiver that would relieve any person from liability imposed by Indiana law. This provision aims to protect franchisees operating in Indiana from being forced to relinquish their legal rights or remedies in advance. However, this subdivision does not apply to arbitration before an independent arbitrator.
For a prospective Management Recruiters franchisee, this means that if they operate in Indiana, the franchise agreement cannot force them to sign away their rights to hold Management Recruiters accountable for liabilities under Indiana law. This offers a degree of protection to the franchisee. The FDD also includes Exhibit E, which provides sample release language.
It is important for potential franchisees to understand how state laws can modify the standard franchise agreement and to be aware of their rights and obligations under both the agreement and applicable state statutes. Franchisees should consult with a legal professional to fully understand the implications of these provisions and how they apply to their specific circumstances.