What conditions apply to a Control Transfer of a Body20 franchise?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
tudio under the Marks and using the System;
(n) We must determine, in our sole discretion, that the purchase price and payment terms will not adversely affect the operation of the Studio. If you or your Owners finance any part of the purchase price, you and they must agree that all obligations under promissory notes, agreements, or security interests reserved in the Studio will be subordinate to the transferee's obligation to pay all amounts due to us and our Affiliates and otherwise to comply with this Agreement; and
(o) You and your Owners and the transferee and its owners must execute a consent to Transfer agreement in a form that we prescribe that describes the conditions that must be complied with in order to obtain our consent to the Transfer.
13.5 Non-Control Transfers. For any Transfer that does not result in a Control Transfer, in addition to any other conditions that we reasonably specify, you and/or your transferee must satisfy (unless waived by us) the conditions in Sections 13.4 (Control Transfer), except the following conditions will not apply: Section 13.4(g) (obtain landlord's consent), 13.4(i) (complete training), 13.4(k) (sign new franchise agreement), and 13.4(l) (renovate Studio). You and your Owners must sign the form of agreement and related documents that we then specify to reflect your new ownership structure.
13.6 Transfer to an Entity. We will consent to the assignment of this Agreement to an Entity that you form for the convenience of ownership, provided that: (i) the Entity has and will have no other business besides operating Studio; (ii) you satisfy the conditions in Sections 13.4(a) (pay the applicable Transfer Fee), 13.4(b) (all payments made), 13.4(c) (comply with obligations), 13.4(d) (sign general release), 13.4(e) (remain liable for pre-Transfer obligations), 13.4(f) (remain bound to certain provisions), and 13.4(j) (sign assignment and guaranty); and (iii) the Owners hold equity interests in the new Entity in the same proportion shown in Appendix A.
13.7 Permitted Transfers. The other provisions in this Section do not apply, including our right of first refusal and right of approval, to the following Transfers:
(a) Security Interests. You may grant, without obtaining our consent, a security interest in the Site (if you own the Site), the Studio, or any Operating Assets to a financial institution or other party that provided or provides any financing for your acquisition, development, and/or operation of the Studio, but you may not grant a security interest in this Agreement. Any foreclosures or other exercise of the rights granted under any security interest are subject to all applicable terms and conditions of this Section 13. For the avoidance of doubt, in no event shall any secured party be entitled to (i) use on your or their behalf, or receive an assignment of your License to use, the Intellectual Property under this Agreement or (ii) use, assign, possess, or have access to the Proprietary Information.
(b) Transfer to a Revocable Trust.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, a Control Transfer of a franchise is subject to several conditions. Body20 requires that the franchisee, their owners, the transferee, and the transferee's owners execute a consent to Transfer agreement. This agreement, in a form prescribed by Body20, outlines the specific conditions that must be met to secure Body20's consent for the transfer.
In addition to any other conditions that Body20 might reasonably specify, several enumerated conditions must be satisfied for a Control Transfer. These include paying the Transfer Fee, ensuring all financial and other obligations to Body20, its affiliates, and approved suppliers are current and fully satisfied, and that the proposed transferee and their representatives successfully complete Body20's then-current training program at their own expense.
The proposed transferee must also enter into a written assignment, in a form satisfactory to Body20, agreeing to discharge and guarantee all of the franchisee's obligations under the Franchise Agreement. They must also execute Body20's then-current form of personal guarantee. Furthermore, the transferee must execute Body20's then-current franchise agreement for new franchisees, for a term ending on the last day of the existing Term, along with any other agreements Body20 may require. The terms of the new franchise agreement may differ significantly from the original agreement, including different fees. The prospective transferee will not be required to pay any initial Franchise Fee.
Additional requirements include the transferee making arrangements to modernize, renovate, or upgrade the studio to meet Body20's current System Standards for new studios, and covenanting to continue operating the studio under Body20's Marks and System. Body20 must also determine, in its sole discretion, that the purchase price and payment terms will not adversely affect the studio's operation. If the franchisee or their owners finance any part of the purchase price, they must agree that all obligations under promissory notes, agreements, or security interests reserved in the studio will be subordinate to the transferee's obligation to pay all amounts due to Body20 and its Affiliates and otherwise comply with the Franchise Agreement.