To what extent is the release of claims required from the franchisee and owners in a Body20 Control Transfer?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
(d) You and your Owners must execute a general release, in a form that we prescribe, of any and all claims (to the extent permitted by Applicable Laws) against us, our Affiliates, and our and our Affiliates' past, present, and future officers, directors, mangers, members, equity holders, agents, and employees, including claims arising under Applicable Laws;
(e) You and your Owners must agree to remain liable for all of the obligations to us in connection with the Studio arising before the effective date of the Transfer and execute any and all instruments that we reasonably request to evidence such liability;
(f) You and your Owners must continue to be bound by the provisions of Sections 9 (Intellectual Property), 10 (Proprietary Information), 11 (Indemnification), and 12 (Noncompete Covenants) as if they were the Franchisee and this Agreement had expired or terminated as of the effective date of the Transfer;
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, a significant condition for a control transfer of a Body20 franchise involves the execution of a general release of claims. Specifically, both the franchisee and their owners must provide this release. This release covers any and all claims against Body20, its affiliates, and their respective officers, directors, managers, members, equity holders, agents, and employees, encompassing claims arising under applicable laws.
This requirement means that as part of the transfer process, the franchisee and owners must waive their rights to pursue any existing or future legal claims against Body20. This includes various types of claims, to the extent permitted by applicable laws. However, in Maryland, the general release required as a condition of sale and/or assignment/transfer will not apply to any liability arising under the Maryland Franchise Registration and Disclosure Law.
Furthermore, the franchisee and owners must agree to remain liable for all obligations to Body20 in connection with the studio that arose before the effective date of the transfer. They must also execute any instruments that Body20 reasonably requests to evidence this liability. Additionally, even after the transfer, the franchisee and owners will continue to be bound by the provisions related to intellectual property, proprietary information, indemnification, and non-compete covenants, as if the franchise agreement had expired or terminated. This ensures Body20's continued protection of its interests even after the transfer of ownership.