To what extent are the general releases that Body20 franchisees and owners sign at closing required to comply with Applicable Laws?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
No statement, questionnaire, or acknowledgement signed or agreed to by you in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by us, any franchise seller, or any other person acting on behalf of us. This provision supersedes any other term of any document executed in connection with the franchise.
The general release required as a condition of renewal, sale and/or assignment/transfer will not apply to any liability arising under the Maryland Franchise Registration and Disclosure Law.
Any release required as a condition of renewal, sale and/or assignment/transfer will not apply to the extent prohibited by the North Dakota Franchise Investment Law.
To the extent required by Article 33 of the General Business Law of the State of New York, all rights and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this provision that the non-waiver provisions of GBL Sections 687.4 and 687.5 be satisfied.
The Development Agreement and Franchise Agreement require you to sign a general release of claims upon renewal of the Franchise Agreement or transfer of the Development Agreement or Franchise Agreement. California Corporations Code Section 31512 provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of that law or any rule or order
thereunder is void. Section 31512 might void a waiver of your rights under the Franchise Investment Law (California Corporations Code Section 31000 – 31516). Business and Professions Code Section 20010 might void a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 – 20043).
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, the enforceability and interpretation of general releases signed by franchisees are subject to certain state laws, particularly in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
Specifically, Body20 cannot enforce any statement, questionnaire, or acknowledgement that waives claims under applicable state franchise law, including fraud in the inducement, or disclaims reliance on statements made by Body20 or its representatives. This provision overrides any conflicting terms in other documents.
For franchisees in Maryland, the general release required for renewal, sale, or transfer does not apply to liabilities arising under the Maryland Franchise Registration and Disclosure Law. Similarly, in North Dakota, any release required as a condition of renewal, sale, or transfer will not apply to the extent prohibited by the North Dakota Franchise Investment Law. In New York, the franchisee retains all rights and causes of action arising from Article 33 of the General Business Law, ensuring that the non-waiver provisions of GBL Sections 687.4 and 687.5 are satisfied. In California, Section 31512 of the California Corporations Code might void a waiver of franchisee rights under the Franchise Investment Law.