Will Body20 be considered a fiduciary with respect to Brand Fund Fees?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Fund Management. We may, but are not obligated to, establish the Brand Fund, a segregated or independent fund into which all Brand Fund Fees will be paid. In no event will we be deemed a fiduciary with respect to any Brand Fund Fees we receive or
administer. We are not required to have an independent audit of the Brand Fund completed. We will prepare an unaudited statement of contributions and expenditures for the Brand Fund and make it available within 60 days after the close of our fiscal year to franchisees that make a written request for a copy. If any monies in the Brand Fund remain at the end of a fiscal year, they will carry-over in the Brand Fund into the next fiscal year. We or one of our Affiliates may make or otherwise arrange loans to the Brand Fund in any year in which the balance of the Brand Fund is negative and charge a reasonable rate of interest. The amounts loaned to the Brand Fund will be repaid from future contributions to the Brand Fund in the year the loan is made or in subsequent years.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 will not be deemed a fiduciary with respect to any Brand Fund Fees it receives or administers. Body20 may establish a Brand Fund, a segregated or independent fund into which all Brand Fund Fees will be paid.
This means that Body20 has considerable discretion in how the Brand Fund is managed and spent. While Body20 may consult with a franchisee advisory council or a committee of franchisees, they ultimately have the final say on all marketing programs and uses of the Brand Fund. This is a common practice in franchising, where the franchisor typically controls the brand and marketing strategy.
Body20 is not required to have an independent audit of the Brand Fund completed, but they will prepare an unaudited statement of contributions and expenditures for the Brand Fund. This statement will be made available to franchisees who make a written request within 60 days after the close of Body20's fiscal year. Franchisees should be aware that they may not directly benefit from the Brand Fund in proportion to their contributions, and other franchisees may have different contribution rates or may not be required to contribute at all.