Does the Body20 Development Agreement grant the developer the right to franchise, license, subfranchise, or sublicense others to develop, open, or operate Studios?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
1. Grant of Development Rights and Development Area.
1.1 Grant of Development Rights. Subject to the terms and conditions of this Agreement, we grant to you the right, and you undertake the obligation, to develop and open in the area designated on Appendix A to this Agreement (the "Development Area") the number of Studios specified in Appendix A in accordance with the development schedule specified in Appendix A (the "Development Schedule"). This Agreement does not give you any right to franchise, license, subfranchise, or sublicense others to develop, open, or operate Studios. Only you (and/or your Affiliated Entities) have the right to develop and open Studios pursuant to this Agreement. This Agreement does not grant you any right to use the Marks or the System (as such terms are defined in the Initial Franchise Agreement). Rights to use the Marks and the System are granted only by the Franchise Agreements.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the Development Agreement does not grant the developer the right to franchise, license, subfranchise, or sublicense others to develop, open, or operate Body20 studios. The agreement explicitly states that only the developer (and/or their Affiliated Entities) has the right to develop and open studios under the agreement. Rights to use the Body20 marks and system are granted only by the Franchise Agreements, not the Development Agreement.
This means that a Body20 Area Developer is responsible for opening and operating the specified number of studios within their Development Area according to the Development Schedule. They cannot delegate or transfer the franchising rights to third parties. However, the developer can form Affiliated Entities to operate individual studios, provided they maintain at least 51% ownership in these entities and that these entities meet Body20's criteria for franchisees.
This restriction ensures that Body20 maintains control over its brand and the quality of its franchise network. It also means that prospective developers must have the resources and capabilities to directly manage the development of multiple studios within their designated area. The developer and their Owners must also sign a personal guarantee and agree to assume full and unconditional liability for, and agree to perform, all obligations, covenants and agreements contained in the Franchise Agreement.
After the Development Agreement expires or is terminated, Body20 and its Affiliates have the right to develop and operate studios, and license third parties to do the same, within the Development Area. This is subject only to the developer's (or an Affiliated Entity's) rights within a Territory under a Franchise Agreement with Body20 then in effect.