According to the Body20 FDD, what section discusses the Development Fee?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.2 Development Fee. Upon execution of this Agreement, you must pay us a development fee in the amount specified on Appendix A (the “Development Fee”), which will be equal to 100% of the aggregate of all of the Franchise Fees due for the Studios that you commit to develop under this Agreement.
- 2.3 Application of Fee and Non-refundability. The Development Fee will be credited towards the Franchise Fee due for each Studio that you develop pursuant to this Agreement. Thus, there shall be no additional Franchise Fee due under each Franchise Agreement signed pursuant to this Development Agreement. The Development Fee is fully earned by us when we and you sign this Agreement and is non-refundable, even if you do not develop Studios in accordance with the Development Schedule.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Section 2.2 of Item 23 discusses the Development Fee. Specifically, it states that upon the execution of the Development Agreement, the franchisee must pay Body20 a Development Fee. The amount of this fee is specified in Appendix A and is equal to 100% of the total Franchise Fees for all studios the franchisee commits to develop under the agreement.
This Development Fee is credited towards the Franchise Fee due for each studio developed under the agreement, meaning no additional Franchise Fee is required for each subsequent studio. However, the Development Fee is fully earned by Body20 upon signing the agreement and is non-refundable, even if the franchisee fails to develop the studios according to the agreed-upon Development Schedule.
For a prospective Body20 franchisee, this means a significant upfront investment is required, covering all franchise fees for the committed studios. This fee is non-refundable, representing a financial risk if the franchisee cannot fulfill the development schedule. It is important for potential franchisees to carefully consider their ability to meet the development obligations before signing the agreement and paying the Development Fee.