Can Degree Wellness require a franchisee to sign a general release as a condition of transfer in Minnesota?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- (iv) The Disclosure Document and Franchise Agreement state that you must sign in favor of us, officers, directors, agents, and employees, and our affiliates and their officers, directors, agents, and employees, as a condition to renew or transfer your franchise, a release from liability of all claims that you may have against us, our officers, directors, agents, employees, or our affiliates or their officers, directors, agents, and employees, as a condition to renew or transfer your franchise, a release from liability of all claims that you may have against us and/or our officers, directors, agents, and employees under the Franchise Agreement or any other agreement.
Minnesota Rule part 2860.4400D prohibits requiring a franchisee to assent to a release, assignment, novation, or waiver that would relieve any person from liability imposed by the Minnesota Franchise Law, provided that this rule shall not bar the voluntary settlement of disputes.
Accordingly, Item 17 of the Disclosure Document and Sections 2.4(c) and 14.5(f) of the Franchise Agreement are hereby revised to exclude any claims arising under the Minnesota Franchise law from any general release of liability that you or may be required to sign in favor of us, our directors, officers, agents, and employees, and our affiliates and their directors, officers, agents, and employees, as a condition to renew the Franchise Agreement, or transfer the Franchise Agreement.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, Minnesota law places restrictions on requiring franchisees to sign general releases as a condition of transfer. Specifically, Minnesota Rule 2860.4400D prohibits Degree Wellness from requiring a franchisee to agree to a release, assignment, novation, or waiver that would relieve any person from liability imposed by the Minnesota Franchise Law. However, this rule does not prevent the voluntary settlement of disputes. To comply with Minnesota law, Degree Wellness has amended its franchise agreement to exclude claims arising under the Minnesota Franchise Law from any general release required for franchise renewal or transfer.
Therefore, Degree Wellness cannot require a franchisee to sign a general release that includes claims arising under Minnesota Franchise Law as a condition of transfer. The franchise agreement is revised to reflect this, ensuring that franchisees do not waive their rights under Minnesota Statutes 1973 Supplement, Sections 80C.01 to 80C.22. This amendment is specifically noted in Item 17 of the Disclosure Document and Sections 2.4(c) and 14.5(f) of the Franchise Agreement.
In practical terms, this means that if a Degree Wellness franchisee in Minnesota transfers their franchise, they may be required to sign a general release, but that release will explicitly exclude any claims they might have against Degree Wellness that arise from violations of Minnesota franchise law. This provides an added layer of protection for franchisees in Minnesota, ensuring they do not inadvertently waive their legal rights under state law during the transfer process. Prospective franchisees should carefully review the Minnesota Amendment to Franchise Agreement to fully understand their rights and obligations.