Under what circumstances will a transferring Eos Worldwide franchisee not have liability for claims arising from the transferee's operation of the franchised business?

According to Eos Worldwide's 2025 Franchise Disclosure Document, a transferring franchisee will generally not be liable for claims, debts, or obligations that arise from the new franchisee's operation of the business after an approved transfer. However, this release from liability is not automatic.

Specifically, the FDD states that the transferring franchisee remains responsible for obligations related to their own operation of the franchise, including indemnification and providing information, even after the transfer. This responsibility is shared jointly and severally with the new franchisee unless Eos Worldwide provides an express written release. The transfer is treated as a termination of the agreement for determining post-transfer obligations.

In practical terms, this means that if a franchisee sells their Eos Worldwide franchise, they are typically free from future liabilities caused by the buyer's actions, provided Eos Worldwide approves the transfer. However, the original franchisee should seek a written release from Eos Worldwide to ensure they are fully absolved of any ongoing responsibilities or liabilities related to their past operation of the franchise. This is a fairly standard clause in franchise agreements, intended to protect the franchisor from liabilities stemming from the previous owner's actions or inactions.