What actions are Body20 franchisees prohibited from taking when Body20 manages the Body20 Studio after a default?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
(viii) enter the Studio's premises and assume the management of the Studio ourselves or appoint a third party (who may be our Affiliate) to manage the Studio. We or our appointee may charge you the Management Fee during the period of management. All funds from the operation of the Studio while we or our appointee assumes its management will be kept in a separate account, and all of the expenses of the Studio will be charged to that account. We or our appointee has a duty to utilize only reasonable efforts and will not be liable to you for any debts, losses, or obligations the Studio incurs, or to any of your creditors for any products or services the Studio purchases, while managing it. You shall not take any action or fail to take any action that would interfere with our or our appointee's exclusive right to manage the Studio and may, in our sole discretion, be prohibited from visiting the Studio so as to not interfere with its operations. Our (or our appointee's) management of the Studio will continue for intervals lasting up to 90 days each (and, in any event, for no more than a total of one year), and we will during each interval periodically discuss the Studio's status with you.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, if a franchisee defaults and Body20 or its appointee assumes management of the Body20 studio, the franchisee is prohibited from taking any action that would interfere with Body20's or its appointee's exclusive right to manage the studio. Furthermore, Body20 has the discretion to prohibit the franchisee from visiting the studio to prevent interference with operations.
This provision ensures that Body20 has complete control over the studio's operations during the management period, which can last for intervals of up to 90 days each, but no more than a total of one year. This allows Body20 to implement necessary changes and address any issues without obstruction from the franchisee.
While Body20 or its appointee manages the studio, they have a duty to utilize only reasonable efforts and will not be liable to the franchisee for any debts, losses, or obligations the studio incurs, or to any of the franchisee's creditors for any products or services the studio purchases. This highlights that Body20's primary goal is to stabilize and improve the studio's performance, but they are not assuming full financial responsibility for pre-existing or new liabilities.
During each management interval, Body20 will periodically discuss the studio's status with the franchisee. This communication ensures the franchisee is kept informed about the studio's progress and any changes being implemented, despite their limited involvement in the day-to-day operations. This arrangement aims to balance Body20's need for operational control with the franchisee's interest in the business's performance.