Must a Body20 franchisee and their owners execute a general release to obtain a successor term?

According to Body20's 2025 Franchise Disclosure Document, a franchisee and their owners must execute a general release to obtain a successor term. Specifically, to exercise the right to obtain a Successor Term, the franchisee and their owners must execute a general release, in a form prescribed by Body20, that covers any and all claims against Body20, its affiliates, and their respective officers, directors, shareholders, and employees. This release pertains to claims arising out of, or relating to, the franchisee's studio.

This requirement means that as a condition of renewing their franchise agreement for a subsequent term, a Body20 franchisee must relinquish any existing or future legal claims they may have against the franchisor. This is a significant commitment, as it potentially limits the franchisee's legal recourse against Body20 for any grievances that may arise during the initial or successor term. Franchisees should carefully consider the implications of this release and consult with legal counsel to understand the full scope of their rights and obligations.

However, it's important to note that the requirement to provide a general release as a condition of renewal, sale, and/or assignment/transfer does not apply to any liability arising under the Maryland Franchise Registration and Disclosure Law. Similarly, franchisees in New York enjoy certain non-waiver provisions under the New York State General Business Law, which means that their rights and causes of action arising from these provisions remain in force, notwithstanding the general release requirement. These state-specific exceptions provide some protection to franchisees in Maryland and New York, ensuring that they do not waive their rights under local franchise laws when signing a general release.

Prospective Body20 franchisees should be aware of this condition and carefully evaluate its potential impact on their business. They should also inquire about the specific form and scope of the general release to fully understand what claims they are waiving. Additionally, franchisees should be aware of any state-specific laws that may provide additional protections or limitations on the enforceability of such releases.