Are Body20 franchisees required to sign general releases at the closing of the asset purchase?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS GENERAL RELEASE ("Release") is executed on |
|---|
| by |
| ("Franchisee"), |
| ("Guarantors"), |
| ("Transferee") as a condition of (1) the transfer of the Franchise Agreement |
| dated [month] [day], |
| [year] |
| between |
| BODY20 |
| Franchisor |
| LLC |
| ("Franchisor") |
| and |
| Franchisee |
| ("Franchise |
| Agreement"); or (2) the execution of a successor Franchise Agreement by Franchisee and |
| Franchisor. (If this Release is executed under the conditions set forth in (2) above, all references |
| in this Release to "Transferee" should be ignored.) |
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.
- RELEASES. The following is added to the end of Sections 2.2(d), 4.3, 4.5, 13.4(d), 13.5, 13.6, and 15.7(d) of the Franchise Agreement:
Notwithstanding the foregoing, all rights enjoyed by you 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 to the extent required by the non-waiver provisions of GBL Sections 687.4 and 687.5, as amended.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, franchisees may be required to sign a general release as a condition of transfer of the Franchise Agreement. Specifically, a general release is executed by the franchisee, any guarantors, and any transferee as a condition of the transfer of the franchise agreement. This release is between the franchisee and Body20 Franchisor LLC.
However, there are exceptions to this general release requirement for franchisees in certain states. For example, in Maryland, the general release required as a condition of renewal, sale, assignment, or transfer will not apply to any liability arising under the Maryland Franchise Registration and Disclosure Law. Similarly, in New York, franchisees retain all rights and causes of action arising from the provisions of Article 33 of the General Business Law of the State of New York, as amended.
For prospective Body20 franchisees, it's important to understand the implications of signing a general release, as it could limit their ability to pursue certain legal claims against the franchisor in the future. Franchisees should carefully review the release and consult with an attorney to understand their rights and obligations, especially considering the specific laws of their state.