What is the consequence if a Body20 franchisee fails to open for business by the Opening Deadline?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
different terms than the Initial Franchise Agreement, including different fees (though no Franchise Fee shall be owed under such agremeent) and territorial rights. You must sign a Franchise Agreement for a Studio before you may execute a lease, sublease, or purchase agreement intended for such Studio or commence construction of such Studio. We will not be obligated to offer you a Franchise Agreement for a Studio unless:
1. we have complied with all applicable franchise registration and disclosure laws and, if required by applicable laws, have provided you with a copy of our then-current Franchise Disclosure Document; and
2. you and any Affiliated Entities have fully complied with any Franchise Agreements that are in effect.
3.2 Deadlines. You must enter into Franchise Agreements and develop and open Studios in accordance with the deadlines set forth in the Development Schedule. Signing Deadline. By each "Signing Deadline" specified in the Development Schedule, you must have signed our then-current standard form of Franchise Agreement for the applicable number of Studios in the Development Area specified on the Development Schedule. Opening Deadline. By each "Opening Deadline" specified in the Development Schedule, you must have the applicable number of Studios in the Development Area open and operating. Discretionary Extension. We may, in our sole discretion, extend any Signing Deadline or any Opening Deadline, which we may condition on your payment of an Extension Fee and execution of a general release. The "Extension Fee" for each Studio will be $2,500 per month (or portion of a month) that the Signing Deadline or Opening Deadline for such Studio is extended. Any extension that we grant you (or your Affiliated Entity) will apply only to the Studios for which you (or your Affiliated Entity) obtained the extension and will not extend, delay, or otherwise impact any other deadline under the Development Schedule. Disclosure Extension. If you are unable to execute a Franchise Agreement by the Signing Deadline because we are unable to timely deliver a required Franchise Disclosure Document (due to any lapse or expiration of our franchise registration, because we are in the process of amending such documents or registration, or for any other reason), we will adjust such Signing Deadline and Opening Deadline for the applicable Studio to take into consideration the date on which we were able to provide you with a Franchise Disclosure Document, without requiring payment of an Extension Fee or the execution of a general release.Damaged Businesses.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, failing to open for business by the Opening Deadline constitutes an Event of Default under the Franchise Agreement.
An Event of Default allows Body20 to terminate the Franchise Agreement. However, Body20 may, at its sole discretion, extend the Opening Deadline, potentially conditioned on the franchisee paying an Extension Fee and executing a general release. The Extension Fee is $2,500 per month (or portion of a month) that the Opening Deadline is extended. Any extension granted applies only to the specific studio for which it was obtained and does not affect other deadlines in the Development Schedule.
It is important to note that if the inability to meet the Signing Deadline is due to Body20's failure to provide a timely Franchise Disclosure Document, the Signing Deadline and Opening Deadline will be adjusted without requiring an Extension Fee or a general release. Additionally, if a Studio is destroyed or damaged by an event beyond the franchisee's control, the franchisee must notify Body20 and diligently work to restore the Studio at the same location or a substitute site approved by Body20.