DISCLAIMER:  The opinions and comments of individual franchisees expressed herein are solely the opinions of those individual franchisees and do not necessarily state or reflect the opinions of the Owners 8 Association or its attorneys.  The  information in this website is the sole property of the Owners 8 Association and any duplication or reprint cannot be made without the  express written consent of  Owners 8 Association.

IMPORTANT LEGAL DOCUMENTS LISTED BELOW:

1.  BELOW IS SOME VERY SIGNIFICANT INFORMATION THAT MUST BE REVIEWED
     BY EACH FRANCHISEE IN ORDER TO PROTECT THEM AND STOP THEM FROM
     SIGNING THEIR RIGHTS AWAY.

ALERT: The O8A recently has learned that Super 8 is attempting to require franchisees to sign releases during the terms of their franchise agreements, as a condition to approving a change in the ownership of the franchise or other change to the franchise agreement, or to sign releases upon the expiration or termination of their franchise agreements.  In order to induce franchisees into signing releases upon the expiration or termination of their franchise agreements, Super 8 has sent letters to the franchisees, claiming that franchisees owe Super 8 substantial fees or liquidated damages.  If the franchisee agrees to sign the release, Super 8 will agree waive its right to collect such fees or damages from the franchisee.  However, the claims in Super 8’s letters may or may not be true, and the letters may simply be a scare tactic to get franchisees to sign releases and waive any potential claims they may have against Super 8.

The release Super 8 is requiring its franchisees to sign is styled as an “Amendment to Franchise Agreement”, and states:

You, on behalf of yourself, your partners, officers, employees, directors, shareholders, and the successors and assigns of all of them, hereby release and hold harmless us, our officers, employees, agents, directors, shareholders, and the successors and assigns of all of them from any and all claims and causes of action whatsoever arising prior to and through the date of this Amendment relating to the offer, sale, negotiation, default, and/or performance of the Franchise Agreement for the Facility.

Amendment to Franchise Agreement ¶ 3.  (A copy of the redacted “Amendment to Franchise Agreement”, which contains the release, is attached to this letter as Exhibit A.)  As written, this release, if legally enforceable, operates to bar any and all potential claims a franchisee, and its partners, officers, employees, directors, shareholders, and the successors and assigns of all of them, may have against Super 8 and Wyndham that arose prior to the execution of the release.  (For franchisees who have already signed releases, a couple of possible legal grounds for challenging the enforceability of the release would be as follows:  (1) if no consideration was furnished to the franchisee in connection with getting the franchisee to sign the release, the release may be unenforceable; and (2) if the release was required as a condition of approving a transfer of the franchise, certain states have franchise acts whereby the franchisor may not lawfully require a release as a condition of approving a transfer.)  While the Amendment to Franchise Agreement contains a release of claims for the franchisee, it does not contain a similar release of claims for Super 8.

Super 8 is currently making the argument in the Bird Hotel Corp. class action litigation that franchisees who have signed releases are barred from asserting any claims against Super 8.  Specifically, Super 8 is arguing that any potential class member who signed a release either during the term of their franchise agreement or at the conclusion of their franchise agreement is precluded from recovering any Trip Rewards fees as part of the class action.  Bird Hotel Corp.’s attorneys intend to resist this argument.  However, it is vitally important for franchisees to be aware of Super 8’s tactic and to fully understand the impact of signing the release.

If you find yourself faced with a release from Super 8, keep in mind the following:     

·        Read the language of the release carefully.  Make sure you understand what types of claims the release bars and who the release applies to.  The language of Super 8’s current release is quite broad—the release language bars any and all of your claims arising prior to the release’s execution and applies to you, your partners, officers, employees, directors, shareholders, and the successors and assigns of all of them.  If you have difficulty understanding the language of the release, you may want to seek legal advice so you know all of the potential consequences of signing the release.

·        Think about the potential claims you might have against Super 8 and which of those claims you would be releasing if you signed the release.  Under Super 8’s current release, you would be releasing any and all claims you had against Super 8 that arose prior to the execution of the release.  Even if you think you do not have any claims against Super 8, the law (and your attorney) may tell you differently.  Make sure you do not inadvertently release claims, simply because you think you do not have any claims.

·        Think about the potential claims Super 8 might have against you. (The most common claims Super 8 would have against you likely would be claims for unpaid royalty fees, system assessment fees, TripRewards fees, or other similar recurring fees.)  If Super 8 is going to require you to release your claims against Super 8, you should request that Super 8 also release its claims against you.  The release Super 8 is currently requiring its franchisees to sign is completely one-sided—the franchisee agrees to release any and all of its claims against Super 8, but Super 8 does not agree to release any and all of its claims against the franchisee. You do not want to give up the legal remedies you may have against Super 8, but then leave yourself exposed to substantial liability to Super 8, in the event Super 8 would file suit against you.

·        Finally, do not rely on legal advice from Super 8.  Seek your legal advice from a qualified franchisee attorney and do not simply sign the release because Super 8 says you have to do so. 

It is likely that each franchisee’s situation will require a case-by-case analysis of the release at issue and whether it is in the franchisee’s best interest to sign, or to refuse to sign, the release presented to the franchisee by Super 8.  However, by fully understanding the consequences of signing a release, you can preserve your legal rights against Super 8 and avoid inadvertently releasing any potential claims you may have against Super 8.