According to the Body20 FDD, what constitutes a 'Control Transfer'?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| or our affiliates, we will disclose to you any required fees that you must pay, which will not exceed 115% of our and our affiliates' actual costs and expenses. | |||
| Product, Service, Supplier, and Service Provider Review | The greater of $1,000 or our and our affiliates' actual costs and expenses related to inspections or the testing the proposed product or evaluating the proposed service or service provider, including personnel and travel costs. | Upon demand | Payable if you wish to offer products or use any supplies, equipment, or services that we have not approved or wish to purchase from a supplier or service provider that we have not approved, whether or not we approve the item, service, supplier, or service provider. |
| Mystery Shopper Program | Currently, we do not charge you a mystery shopper program fee. | Upon demand | We may require you to participate in a mystery shopper service. If we engage the mystery shopping service on your behalf, you must pay us a fee that will not exceed 110% of our and our affiliates actual costs and expenses. Details of any program and fees will be included in the Manuals. |
| Successor Fee | 25% of the then-current franchise fee | Upon execution of successor franchise agreement | Payable if you are qualify for, and enter into, a successor term. |
| Transfer Fee Under the Franchise Agreement | 25% of the then-current franchise fee for any transfer resulting in a change of control; $5,000 for any other transfer. | 50% due when you provide us notice of the proposed transfer and 50% when the transfer closes | Payable to us if you transfer any interest in your Franchise Agreement, entity, or Studio. A "Control Transfer" occurs if there is a transfer of (i) any interest in the Franchise Agreement, (ii) the Studio or substantially all of its assets, (iii) more than 20% of the ownership interests in you, or (iv) any interests that result in a change in control of your entity. See Item 17.k for the definition of "transfer." If the transfer does not close, we will refund the 50%, less our actual costs and expenses related to the propo |
Source: Item 6 — OTHER FEES (FDD pages 19–26)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, a 'Control Transfer' has specific implications regarding transfer fees. If a Body20 franchisee intends to transfer any interest in their Franchise Agreement, entity, or Studio, they may be subject to a transfer fee. The amount of this fee depends on whether the transfer results in a change of control. For transfers that do result in a change of control, the transfer fee is 25% of the then-current franchise fee.
The FDD specifies that a 'Control Transfer' occurs under the following conditions: (i) a transfer of any interest in the Franchise Agreement, (ii) a transfer of the Studio or substantially all of its assets, (iii) a transfer of more than 20% of the ownership interests in the franchisee's entity, or (iv) any transfer of interests that results in a change in control of the franchisee's entity.
It's important to note that a transfer fee is not due for transfers upon the death, incapacity, or bankruptcy of any owner. For any other type of transfer, including a Control Transfer, 50% of the fee is due when the franchisee provides notice of the proposed transfer, and the remaining 50% is due when the transfer closes. If the transfer does not close, Body20 will refund 50% of the fee, less their actual costs and expenses related to the proposed transfer. Prospective franchisees should carefully consider these conditions and potential costs when planning for the future of their Body20 franchise.