When is the Body20 Development Fee considered fully earned by the franchisor?

According to Body20's 2025 Franchise Disclosure Document, the development fee is considered fully earned when both Body20 and the franchisee sign the Development Agreement. This fee is non-refundable, regardless of whether the franchisee ultimately develops the studios according to the agreed-upon development schedule. The development fee amount is specified in Appendix A of the Development Agreement.

The development fee is equal to 100% of the aggregate of all initial franchise fees due for the studios that the franchisee commits to develop under the Development Agreement. This fee is credited towards the franchise fee for each studio developed under the agreement, meaning no additional franchise fee is due for each subsequent franchise agreement signed pursuant to the Development Agreement.

This arrangement carries significant implications for prospective Body20 franchisees. Because the development fee is earned upon signing and is non-refundable, franchisees risk losing the entire fee if they fail to open the agreed-upon number of studios. Therefore, careful consideration of market conditions, personal capabilities, and access to capital is crucial before entering into a Body20 Development Agreement. Franchisees should negotiate a realistic development schedule and understand the potential financial consequences of not meeting those obligations.