During the association with Body20, can a franchisee divert business to a Competitive Business?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
14. Competitive Business (Section 12.1): A "Competitive Business" means: (i) any gymnasium, studio, athletic or fitness center, health club, exercise, aerobics facility, or similar fitness or exercise facility or business, (ii) any business that offers fitness training or products, services, or Sessions that are similar to those offered by a Studio, and/or (iii) any Entity that grants franchises or licenses for any of the businesses in (i) or (ii).
Section 12 Noncompete Covenants.
- 12.1 During Term. You acknowledge that you will receive valuable, specialized training and confidential information regarding the manufacturing, operational, sales, promotional, and marketing methods of us and the Brand. During the Term, you and your Owners must not, without our prior written consent, either directly or indirectly, for themselves, or through, on behalf of, or in conjunction with any other person or Entity:
- (a) own, manage, engage in, be employed by, advise, make loans to, lease or sublease space to, or have any other interest in any competitive business, as such term is defined in Schedule A (a "Competitive Business") at any location in the United States;
- (b) divert or attempt to divert any business or customer or potential business or customer of the Studio to any Competitive Business, by direct or indirect inducement or otherwise;
- (c) perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; or
- (d) use any vendor relationship established through your association with us for any purpose other than to purchase products or equipment for use or retail sale in the Studio.
- 12.2 After Termination, Expiration, or Transfer. For two years after the expiration or termination of this Agreement or an approved Transfer to a new franchisee, you and your Owners will be subject to the same restrictions as in Section 12.1 (During Term), except the restrictions in Section 12.1(a) and 12.1(b) shall be geographically limited to any Competitive Business that is located within a 10-mile radius of your former Studio or any other Studio that is operating or under development at the time of such expiration, termination, or Transfer.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, franchisees are restricted from diverting business to a Competitive Business during the term of the franchise agreement. A "Competitive Business" is defined broadly as any gymnasium, studio, athletic or fitness center, health club, exercise, aerobics facility, or similar fitness or exercise facility or business; any business that offers fitness training or products, services, or sessions similar to those offered by a Body20 studio; and any entity that grants franchises or licenses for such businesses. This definition is outlined in Schedule A of the franchise agreement.
Specifically, during the term of the agreement, franchisees and their owners are prohibited from diverting or attempting to divert any business or customer or potential business or customer of the Body20 studio to any Competitive Business, whether through direct or indirect inducement or otherwise, without prior written consent from Body20. They are also barred from performing any act injurious or prejudicial to the goodwill associated with the Body20 marks and the System. Additionally, franchisees cannot use vendor relationships established through their association with Body20 for purposes other than purchasing products or equipment for use or retail sale in the studio.
These restrictions extend beyond the termination or expiration of the franchise agreement. For two years after the agreement ends or an approved transfer occurs, franchisees and their owners remain subject to similar restrictions. However, the geographic scope of the non-compete is limited to any Competitive Business located within a 10-mile radius of the former Body20 studio or any other Body20 studio operating or under development at the time of termination, expiration, or transfer. This means that after leaving the Body20 system, a franchisee could potentially operate a competitive business outside of that 10-mile radius without violating the agreement.