Must a Body20 franchisee and their owners execute a general release as part of a Control Transfer?

According to Body20's 2025 Franchise Disclosure Document, as part of a Control Transfer, both the franchisee and their owners are required to execute a general release. This release, in a form prescribed by Body20, covers any and all claims against Body20, its affiliates, and their respective officers, directors, managers, members, equity holders, agents, and employees, to the extent permitted by applicable laws. This includes claims arising under applicable laws.

This requirement means that before a transfer of control can be approved, the franchisee and their owners must waive their rights to pursue any legal claims against Body20. This is a significant condition that prospective franchisees should carefully consider, as it could limit their future legal options. The franchisee and owners must also agree to remain liable for all obligations to Body20 in connection with the studio arising before the effective date of the transfer and must execute any instruments that Body20 reasonably requests to evidence such liability.

Furthermore, even after the transfer, the franchisee and their owners must continue to be bound by certain provisions of the original franchise agreement, including those related to intellectual property, proprietary information, indemnification, and noncompete covenants. This ensures that even after relinquishing control, the franchisee and their owners remain accountable for certain aspects of the business.

It is important to note an exception for franchisees in Maryland. According to a rider to the franchise agreement for use 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.