What constitutes a 'Competitive Business' for Body20 franchisees, as defined in Schedule A?

According to Body20's 2025 Franchise Disclosure Document, a 'Competitive Business' is defined within Appendix A, specifically in the Franchisee-Specific Terms. This definition is crucial because Section 12.1 outlines non-compete covenants that restrict franchisees and their owners from engaging in competitive businesses during the term of the agreement.

Specifically, a 'Competitive Business' includes (i) any gymnasium, studio, athletic or fitness center, health club, exercise, aerobics facility, or similar fitness or exercise facility or business. It also includes (ii) any business that offers fitness training or products, services, or Sessions that are similar to those offered by a Body20 Studio. Finally, it encompasses (iii) any Entity that grants franchises or licenses for any of the businesses described in (i) or (ii).

This definition has significant implications for a prospective Body20 franchisee. During the franchise term, franchisees and their owners are broadly restricted from involvement with any business fitting this description anywhere in the United States, without prior written consent from Body20. After the franchise agreement expires, terminates, or is transferred, these restrictions continue for two years, but are geographically limited to a 10-mile radius of the former Body20 studio or any other Body20 studio operating or under development. This non-compete clause is a standard element in many franchise agreements to protect the franchisor's business model and market share.