How is the Body20 Development Fee applied to the Franchise Fee for each studio developed under the Development Agreement?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.2 Development Fee. Upon execution of this Agreement, you must pay us a development fee in the amount specified on Appendix A (the “Development Fee”), which will be equal to 100% of the aggregate of all of the Franchise Fees due for the Studios that you commit to develop under this Agreement.
- 2.3 Application of Fee and Non-refundability. The Development Fee will be credited towards the Franchise Fee due for each Studio that you develop pursuant to this Agreement. Thus, there shall be no additional Franchise Fee due under each Franchise Agreement signed pursuant to this Development Agreement. The Development Fee is fully earned by us when we and you sign this Agreement and is non-refundable, even if you do not develop Studios in accordance with the Development Schedule.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the Development Fee you pay upon signing the Development Agreement is credited towards the Franchise Fee due for each studio you develop. The Development Fee is equal to 100% of the total Franchise Fees for all studios you commit to develop under the agreement. This means that when you sign a Franchise Agreement for a specific studio under the Development Agreement, no additional Franchise Fee is required.
In simpler terms, the Development Fee acts like a pre-payment for the Franchise Fees of the individual studios you plan to open. Instead of paying a Franchise Fee for each studio as you open it, you pay one lump sum upfront, which is then allocated to cover those individual fees.
It's important to note that the Development Fee is fully earned by Body20 when you sign the Development Agreement and is non-refundable, even if you don't end up developing all the studios outlined in the Development Schedule. This means that if your plans change and you develop fewer studios than initially agreed upon, you will not receive any of the Development Fee back.