How does the Body20 Development Fee relate to the initial Franchise Fee for each studio?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure | Low Estimate | High Estimate | Method of Payment | When Due | To Whom Payment Is Made | |
|---|---|---|---|---|---|---|
| Development Fee (1) | $165,000 | $350,000 | Lump sum | When you sign Development Agreement | Us | |
| Estimated Initial Investment for First Studio (2) | $200,512 | $362,833 | As incurred | As incurred | Us and third parties | |
| TOTAL (3) | $365,512 | $712,833 | #### Notes: |
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- Development Fee. Upon signing the Development Agreement, you must pay us the Development Fee. The Development Fee varies based on the number of Studios you commit to develop. The low estimate is based on a commitment to develop three Studios (in which case the Franchise Fee under each Franchise Agreement would be $55,000 per studio) and the high estimate is based on a commitment to develop 10 Studios (in which case the Franchise Fee under each Franchise Agreement would be $35,000 per studio). The Development Fee will be credited towards the initial Franchise Fee for each Studio developed under the Development Agreement. The Development Fee is not refundable. See Item 5.
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- Estimated Initial Investment for First Studio. For each Studio that you develop under a Development Agreement, you will execute a Franchise Agreement and incur the initial investment expenses for the development of a single Studio as described in the first table of this Item 7. This estimate is based on the expenses described in the first table of this Item 7. The est
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 26–32)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the Development Fee paid when signing a Development Agreement is credited towards the initial Franchise Fee for each studio developed under that agreement. The Development Fee is non-refundable. The amount of the Development Fee varies depending on the number of Body20 studios the franchisee commits to develop.
Specifically, the FDD notes that the low estimate for the Development Fee is based on a commitment to develop three studios. In this scenario, the Franchise Fee under each Franchise Agreement would be $55,000 per studio. The high estimate for the Development Fee is based on a commitment to develop ten studios, where the Franchise Fee under each Franchise Agreement would be $35,000 per studio.
For a prospective Body20 franchisee, this means that the initial investment for the first studio under a Development Agreement does not include the Franchise Fee, as the Development Fee is credited towards it. This is reflected in the estimated initial investment table, where the Franchise Fee is listed separately from the Development Fee. This structure incentivizes franchisees to commit to developing multiple studios, as the per-studio Franchise Fee decreases with a larger commitment, and the Development Fee offsets the Franchise Fee.