Does the Body20 Designated Manager need to have an ownership interest in the franchise entity?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
Your Operating Principal must have at least a 10% ownership interest in your Entity and must have authority over all business decisions related to your Studio and must have the power to bind you in all dealings with us. In addition, you must appoint a Designated Manager to manage the day-to-day business of your Studio, who may also be the Operating Principal. The Designated Manager is not required to have an ownership interest in your Entity. You must provide us with written notice of your Operating Principal and Designated Manager at least 60 days prior to opening and may not change your Operating Principal and Designated Manager without our prior approval.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 55)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the Designated Manager, who handles the day-to-day operations of the Body20 studio, is not required to have an ownership stake in the franchise entity. However, Body20 requires an Operating Principal to have at least a 10% ownership interest in the franchise entity. This Operating Principal must also have the authority to make all business decisions related to the studio and be able to legally bind the franchisee in dealings with Body20.
The Operating Principal can also serve as the Designated Manager, provided Body20 believes they possess sufficient experience and qualifications. This provides flexibility for franchisees who wish to manage their studio directly while also fulfilling the ownership requirement. However, Body20 retains the right to approve or disapprove of the chosen Operating Principal and Designated Manager, ensuring that these key roles are filled by individuals deemed suitable by the franchisor.
This structure allows for different management models. A franchisee could choose to have an owner-operator who fulfills both roles or have a separate manager without ownership. Body20 needs written notice of both the Operating Principal and Designated Manager at least 60 days before opening the studio, and changes to these roles require Body20's prior approval. This ensures Body20 maintains oversight of the studio's management and key decision-makers.