For a Body20 Control Transfer, what happens if the franchisee or transferee does not pay the transfer fee?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
13.3 Transfer Procedure.
- (a) Consent Required.
This Agreement and the License are personal to you, and we have granted the License in reliance on your and your Owners' business skill, financial capacity, and personal character.
Accordingly, neither you nor any of the Owners or any successors to any part of your interest in this Agreement or the License may make any Transfer or permit any Transfer to occur without obtaining our prior written consent, except as provided in Section 13.7 (Permitted Transfers).
Any purported Transfer, without our prior written consent, will be null and void and will constitute an Event of Default (as herein defined), for which we may terminate this Agreement without opportunity to cure.
- (b) Obtaining Consent.
If you or any of your Owners desire to make a Transfer, you must promptly provide us with advance written notice and must submit a copy of all proposed contracts and other information concerning the Transfer and transferee that we reasonably require.
We have the right to communicate with both you, your counsel, and the proposed transferee on any aspect of a proposed Transfer.
No Transfer that requires our consent may be completed until at least 60 days after we receive written notice of the proposed Transfer.
We have sole and absolute discretion to withhold our consent, except as otherwise provided in Sections 13.6 (Transfer to an Entity), 13.7 (Permitted Transfers), and 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy), and we may condition our consent on compliance with any conditions that we specify.
If your Studio is not open and operating, we will not consent to your Transfer of this Agreement, and we are under no obligation to do so.
Our consent to a Transfer does not constitute a waiver of any claims that we have against the transferor, nor is it a waiver of our right to demand exact compliance with the terms of this Agreement.
- 13.4 Control Transfer.
For a proposed Control Transfer, in addition to any other conditions that we reasonably specify, the following conditions apply (unless waived by us):
(a) You or your transferee must pay us the Transfer Fee;
(b) All of your accrued monetary obligations and all other outstanding obligations to us, our Affiliates, and approved suppliers shall be up to date, fully paid, and satisfied;
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, if a franchisee attempts a transfer without the franchisor's prior written consent, it will be considered an Event of Default, potentially leading to the termination of the Franchise Agreement without an opportunity to cure the default. This means Body20 can end the agreement immediately if a transfer occurs without their approval.
For a Control Transfer, the franchisee or transferee must pay Body20 a transfer fee equal to 25% of the then-current franchise fee for a new studio. The franchisee must pay 50% of the transfer fee when providing notice of the proposed transfer, which may be refunded (less costs and expenses) if the transfer does not close. The remaining 50% of the transfer fee is due when the transfer closes.
If the transfer fee or any other obligations are not met, Body20 does not have to consent to the transfer. The document states that Body20 has sole and absolute discretion to withhold consent to a transfer, except as otherwise provided in certain sections, and may condition consent on compliance with any conditions they specify. This protects Body20's interests by ensuring that all financial and operational requirements are satisfied before a transfer is approved.