Can Body20 acquire companies with existing studios inside a franchisee's Body20 territory?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
Once you have selected and we have accepted a Site in the Site Selection Area in accordance with Section 4.1 (Site Selection), we will designate an area within the confines of the Site Selection Area as your protected territory (the "Territory").
You do not have any territorial protection in your Site Selection Area, unless and until we identify your Territory, as explained in Section 4.2 (Definition of the Territory).
Except as provided in this Section 1.3 and for Non-Traditional Locations (as defined below), we and our Affiliates will not open, or license a third party to open, a Studio within your Territory.
Except for the foregoing sentence, we and our Affiliates have the right to conduct any business activities, under any name, in any geographic area, and at any location, regardless of the proximity to or effect on your Studio.
For example, without limitation, we and our Affiliates have the right to:
- (a) establish, or license others to operate, Studios or Sessions operating under the Marks and System at Non-Traditional Locations anywhere, including inside and outside the Territory.
A "Non-Traditional Location" is a site that is located within a larger venue or facility that is likely to draw at least 75% of its customers from people who use such larger facility, including big box gyms and fitness facilities, cruise ships, military bases, college campuses, airports, sports or entertainment venues, hotels or resorts, theme parks, industrial or office complexes, train stations and other transportation facilities, travel plazas, casinos, hospitals, multiunit residential properties, and other similar captive market locations;
- (b) establish or license franchises and/or company-owned studios or businesses offering similar or identical products, services, Sessions, and programs and using the System or elements of the System (i) under the Marks anywhere outside of the Territory or (ii) under names, symbols, or marks other than the Marks anywhere, including inside and outside of the Territory;
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
The 2025 Body20 Franchise Disclosure Document outlines specific territorial protections granted to franchisees, but it also reserves significant rights for Body20 and its affiliates to conduct business activities, potentially including acquisitions, within or near a franchisee's territory. Once a franchisee's site is accepted and a territory is defined, Body20 agrees not to open or license a third party to open a Body20 studio within that territory. However, this protection has exceptions.
Body20 and its affiliates retain the right to conduct any business activities under any name, in any geographic area, and at any location, regardless of its proximity to or effect on a franchisee's studio. This includes establishing or licensing studios or sessions at Non-Traditional Locations, even within the franchisee's territory. A Non-Traditional Location is defined as a site within a larger venue that draws most of its customers from that venue, such as gyms, cruise ships, military bases, campuses, airports, hotels, and similar locations.
Furthermore, Body20 can establish or license franchises or company-owned studios offering similar services under different names or marks anywhere, including inside a franchisee's territory. This suggests that while Body20 may not directly open a competing Body20-branded studio within the protected territory (outside of Non-Traditional Locations), they could potentially acquire a company with existing fitness studios operating under a different brand, even if those studios are located within a franchisee's territory.
Given these provisions, a prospective Body20 franchisee should carefully consider the scope of their territorial protection and the potential for competition from Body20 or its affiliates through alternative business ventures or acquisitions. It would be prudent to seek clarification from Body20 regarding their specific policies on acquisitions of existing fitness businesses within a franchisee's territory to fully understand the competitive landscape.