Does the franchisee covenant not to sue Red Wagon Club as part of the release?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
You, on your own behalf and on behalf of the other Releasing Parties, further covenant not to sue any of the Released Parties on any of the Claims released by this paragraph and represent that you have not assigned any of the Claims released by this paragraph to any individual or entity who is not bound by this paragraph.
IF THE FRANCHISE YOU OPERATE UNDER THE FRANCHISE AGREEMENT IS LOCATED IN CALIFORNIA OR ANY OF THE RELEASING PARTIES IS A RESIDENT OF CALIFORNIA, THE FOLLOWING SHALL APPLY:
SECTION 1542 ACKNOWLEDGMENT. IT IS YOUR INTENTION, ON YOUR OWN BEHALF AND ON BEHALF OF THE RELEASING PARTIES, IN EXECUTING THIS RELEASE THAT THIS INSTRUMENT BE AND IS A GENERAL RELEASE WHICH SHALL BE EFFECTIVE AS A BAR TO EACH AND EVERY CLAIM, DEMAND, OR CAUSE OF ACTION RELEASED BY YOU OR THE RELEASING PARTIES. YOU RECOGNIZE THAT YOU OR THE RELEASING PARTIES MAY HAVE SOME CLAIM, DEMAND, OR CAUSE OF ACTION AGAINST THE RELEASED PARTIES OF WHICH YOU, HE, SHE, OR IT IS TOTALLY UNAWARE AND UNSUSPECTING, WHICH YOU, HE, SHE, OR IT IS GIVING UP BY EXECUTING THIS RELEASE. IT IS YOUR INTENTION,
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, franchisees are required to covenant not to sue as part of the general release. The release covers all claims, damages, and causes of action that the franchisee or their related parties have or may have against Red Wagon Club and its affiliates. This includes any claims arising from the Franchise Agreement or the relationship between the franchisee and Red Wagon Club.
The covenant not to sue prevents franchisees from initiating legal action against Red Wagon Club regarding any of the released claims. This is a standard practice in franchising, designed to protect the franchisor from future litigation related to past events or the franchise relationship. The franchisee also represents that they have not assigned any of the released claims to any individual or entity not bound by this paragraph.
However, if the Red Wagon Club franchise is located in Washington, the general release does not apply to any liability under the Washington Franchise Investment Protection Act RCW 19.100, and the rules adopted thereunder. The FDD also includes a Section 1542 acknowledgment, where the franchisee confirms their intention to execute a general release, understanding they may be giving up claims that are unknown or unsuspected at the time of signing. Franchisees are advised to consult with legal counsel to fully understand the implications of this release and covenant not to sue before signing.