What costs and expenses is a Body20 franchisee responsible for reimbursing if Body20 performs their obligations after a default?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
or benefits that the Brand Fund provides;
- (iv) suspend our or our Affiliates' performance of, or compliance with, any of our or our Affiliates' obligations to you under this Agreement or any other agreement;
- (v) require the temporary closure of the Studio until any defaults are cured and any underlying causes for such defaults are adequately addressed;
(vi) suspend or terminate any temporary or permanent fee reductions to which we might have agreed (whether as a policy, in an amendment to this Agreement, or otherwise);
(vii) undertake or perform on your behalf any obligation or duty that you are required to, but fail to, perform under this Agreement. You will reimburse us upon demand for all costs and expenses that we reasonably incur in performing any such obligation or duty; and/or
(viii) enter the Studio's premises and assume the management of the Studio ourselves or appoint a third party (who may be our Affiliate) to manage the Studio. We or our appointee may charge you the Management Fee during the period of management. All funds from the operation of the Studio while we or our appointee assumes its management will be kept in a separate account, and all of the expenses of the Studio will be charged to that account. We or our appointee has a duty to utilize only reasonable efforts and will not be liable to you for any debts, losses, or obligations the Studio incurs, or to any of your creditors for any products or services the Studio purchases, while managing it. You shall not take any action or fail to take any action that would interfere with our or our appointee's exclusive right to manage the Studio and may, in our sole discretion, be prohibited from visiting the Studio so as to not interfere with its operations. Our (or our appointee's) management of the Studio will continue for intervals lasting up to 90 days each (and, in any event, for no more than a total of one year), and we will during each interval periodically discuss the Studio's status with you.
(c) Exercise of Other Remedies. Our exercise of our rights under Section 14.2(b) (Other Remedies) will not (i) be a defense for you to our enforcement of any other provision of this Agreement or waive or release you from any of your other obligations under this Agreement, (ii) constitute an actual or constructive termination of this Agreement, or (iii) be our sole or exclusive remedy for your default.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, a franchisee is responsible for reimbursing Body20 for all costs and expenses that Body20 reasonably incurs when undertaking or performing any obligation or duty on the franchisee's behalf, which the franchisee has failed to perform under the Franchise Agreement. This includes situations where the franchisee is in default of the agreement.
Additionally, if Body20 assumes management of the studio, either directly or through a third-party appointee, the franchisee may be charged a Management Fee during the period of management. All funds from the operation of the studio during this period will be kept in a separate account, and all expenses of the studio will be charged to that account. However, Body20 or its appointee is only required to utilize reasonable efforts and will not be liable for any debts, losses, or obligations the studio incurs during their management.
Furthermore, if the Franchise Agreement is terminated due to an Event of Default, the franchisee is responsible for promptly paying all damages, costs, and expenses, including reasonable attorneys' fees, incurred by Body20 as a result of the default. These payment obligations will give rise to a lien in favor of Body20 against the studio premises and any personal property, fixtures, equipment, and inventory owned by the franchisee at the time of the default. Body20 is authorized to make filings and execute documents on the franchisee's behalf to perfect this lien.
These provisions highlight the importance of adhering to the Franchise Agreement and fulfilling all obligations, as failure to do so can result in significant financial burdens for the franchisee. It is also important to note that Body20's exercise of these remedies does not prevent them from enforcing other provisions of the agreement or act as a waiver of the franchisee's other obligations.