What is the consideration provided by Red Wagon Club for the franchisee's release?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
WAGON CLUB FRANCHISE, LLC**
GRANT OF FRANCHISOR CONSENT AND FRANCHISEE RELEASE
| franchisee, | ("you" or "your"), currently are parties to a certain Franchise Agreement |
|---|---|
| (the "Franchise Agreement") dated | , 20 . You have asked us to take the |
| following action or to agree to the following request: | |
| . We have the right under the Franchise Agreement to obtain a general release from you and your owners as a condition of taking this action or agreeing to this request. Therefore, we are willing to take the action or agree to the request specified above if you and your owners give us the release and covenant not to sue provided below in this document. You and your owners are willing to give us the release and covenant not to sue provided below as partial consideration for our | |
| willingness to take the action or agree to the request described above. |
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 24–31)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, the franchisee's release and covenant not to sue is considered partial consideration for the franchisor's willingness to take a specific action or agree to a request made by the franchisee. This means that if a franchisee asks Red Wagon Club to take a certain action, such as modifying the franchise agreement, the franchisor may require the franchisee to sign a release, giving up their right to sue the franchisor, as a condition of the franchisor agreeing to the franchisee's request.
This release extends to all claims, known or unknown, that the franchisee may have against Red Wagon Club. The FDD includes an acknowledgment that the franchisee is aware that they may be giving up claims they don't even know exist. Franchisees are advised to consult with legal counsel before signing such a release to fully understand the implications of waiving their rights.
Notably, if the franchise is located in Washington or any releasing parties are residents of Washington, the general release does not apply to liabilities under the Washington Franchise Investment Protection Act RCW 19.100. This provides some protection to franchisees in Washington, ensuring they do not waive their rights under that specific law.