Under what grounds can a franchisee terminate the Eos Worldwide Franchise Agreement?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
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In all other respects, the Franchise Agreement will be construed and enforced with its terms.
FOR MINNESOTA FRANCHISEES ONLY (PLEASE SEE SECTION 21.6 OF THE FRANCHISE AGREEMENT):
ACKNOWLEDGED AND AGREED:
FOR THE STATE OF NEW YORK
In recognition of the requirements of the General Business Laws of the State of New York, Article 33, §§ 680 through 695, the Franchise Agreement for EOS Worldwide Franchising, LLC is amended as follows:
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- General Release. Sections 2.3 and 15.5(f) require Franchisee to sign a general release as a condition of renewal or transfer of the franchise and Section 17.1 requires Franchisee to sign a general release as a condition to exercising its right to terminate the Franchise Agreement; such release shall exclude claims arising under the New York State General Business Law and the regulations issued thereunder.
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- Franchisor Assignment. Franchisor shall not transfer and assign its rights and obligations under the Franchise Agreement unless the transferee is able to perform the Franchisor's obligations under the Franchise Agreement, in Franchisor's good faith judgment, so long as it remains subject to the New York State General Business Law and the regulations issued thereunder.
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- Franchisee Indemnification. Franchisee shall not be required to indemnify Franchisor for any liability imposed upon Franchisor as a result of Franchisee's reliance upon or use of procedures or products that were required by Franchisor, if such procedures or products were utilized by Franchisee in the manner required by Franchisor.
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- Franchisee Termination. Franchisee may terminate the Franchise Agreement upon any grounds available at law.
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- Governing Law. Section 20.1 of the Franchise Agreement requires that the franchise be governed by the laws of the State of Delaware, such a requirement will not be considered a waiver of any right conferred upon the Franchisee by Article 33 of the New York State General Business Law and the regulations issued thereunder.
In all other respects, the Franchise Agreement will be construed and enforced with its terms.
FOR THE STATE OF NORTH DAKOTA
The North Dakota Securities Commission requires that certain provisions contained in the Franchise Agreement for EOS Worldwide Franchising, LLC be amended to be consistent with North Dakota Law, including the North Dakota Franchise Investment Law, North Dakota Century Code Addendum, Chapter 51-19, Sections 51-19-01 et seq. Such provisions in the Agreement are hereby amended as follows:
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- General Release. Sections 2.3 and 15.5(f) require Franchisee to sign a general release as a condition of renewal or transfer of the franchise and Section 17.1 requires Franchisee to sign a general release as a condition to exercising its right to terminate the Franchise Agreement; such release shall exclude claims arising under the North Dakota Franchise Investment Law.
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- Covenant Not to Compete. Covenants not to compete upon termination or expiration of the Franchise Agreement are generally unenforceable in the State of North Dakota except in limited instances as provided by law.
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- General Release. Any provision in the Franchise Agreement which requires the Franchisee to sign a general release upon renewal of the Franchise Agreement is hereby deleted from any Franchise Agreement issued in the State of North Dakota.
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- Waiver of Damages.
Source: Item 22 — CONTRACTS (FDD page 74)
What This Means (2025 FDD)
According to the 2025 Eos Worldwide Franchise Disclosure Document, a franchisee's ability to terminate the Franchise Agreement is subject to certain state laws. For franchisees in New York, the Franchise Agreement can be terminated upon any grounds available at law.
For franchisees in Hawaii, the Hawaii Franchise Investment Law provides specific rights concerning termination, and if any provision in the Franchise Agreement is inconsistent with this law, the Hawaii Franchise Investment Law will take precedence. Similarly, in Puerto Rico and Virginia, termination clauses may be impacted by local laws, requiring 'just cause' or 'reasonable cause' for termination, respectively. If the grounds for default or termination stated in the Franchise Agreement do not meet these legal standards, those provisions may not be enforceable.
In North Dakota, the Franchise Agreement is amended to be consistent with North Dakota law, including the North Dakota Franchise Investment Law. Specifically, any requirement for a franchisee to sign a general release as a condition to exercising their right to terminate the Franchise Agreement will exclude claims arising under the North Dakota Franchise Investment Law. These state-specific amendments ensure that franchisees' rights are protected under local laws, potentially providing additional grounds for termination beyond what is outlined in the standard Franchise Agreement.