What are the consequences for a Body20 franchisee who violates the noncompete covenants?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
You and your Owners must comply with the covenant not to compete in Section 12 (Noncompete Covenants) and the non-disparagement covenant in Section 17.12 (Non-Disparagement).
- 15.12 Injunctive and Other Relief.
You acknowledge that your failure to abide by the provisions of this Section 15 (Your Obligations Upon Expiration or Termination) will result in irreparable harm to us, and that our remedy at law for damages will be inadequate.
Accordingly, you agree that if you breach any provisions of this Section 15, we are entitled to injunctive relief (including the remedy of specific performance) in addition to any other remedies available at law or in equity.
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. With respect to the Owners, the time period in this Section 12.2 will run from the expiration, termination, or Transfer of this Agreement or from the termination of the Owner's relationship with you, whichever occurs first.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, if a franchisee violates the noncompete covenants, Body20 is entitled to injunctive relief, including specific performance, in addition to any other remedies available at law or in equity. This means Body20 can seek a court order to stop the franchisee from continuing the prohibited activity and compel them to fulfill their obligations under the franchise agreement. This acknowledges that a failure to comply with non-compete agreements results in irreparable harm to Body20, making monetary damages inadequate.
Section 12.1 of the Franchise Agreement outlines the noncompete covenants during the term of the agreement. During the term, the franchisee and their Owners must not, without Body20's prior written consent, directly or indirectly engage in any competitive business, divert business or customers to a competitive business, perform any act injurious to the goodwill associated with the Body20 marks and system, or use vendor relationships established through Body20 for unauthorized purposes.
Section 12.2 outlines the noncompete covenants after termination, expiration, or transfer of the agreement. For two years after the expiration or termination of the agreement, the franchisee and their Owners are subject to the same restrictions as during the term, with geographic limitations on competitive businesses within a 10-mile radius of the former studio or any other studio operating or under development. The time period for Owners runs from the expiration, termination, or transfer of the agreement or from the termination of the Owner's relationship with the franchisee, whichever occurs first.
These noncompete covenants are designed to protect Body20's interests by preventing franchisees from using the franchisor's confidential information and business model to compete against the system, both during the term of the agreement and for a reasonable period afterward. The franchisor also requires a payment and performance guarantee, which is attached as Appendix C to the Franchise Agreement. This guarantee ensures that the obligations of the franchisee to the franchisor are met.