Can employee wages be credited towards the Body20 grand opening advertising spending requirement?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
pending Requirement. At our request, you must submit appropriate documentation to verify compliance with the Marketing Spending Requirement. If you fail to spend (or prove that you spent) the Marketing Spending Requirement in any month, then we may, in addition to and without limiting our other rights and remedies, require you to pay us the shortfall as an additional Brand Fund Fee or to pay us the shortfall for us to spend on local marketing for your Studio.
- (d) Grand Opening Advertising. In connection with the opening of the Studio, you must spend a minimum of $15,000 for grand opening advertising and promotion beginning at least 60 days before, and ending 30 days after, the opening of your Studio in accordance with a plan that you must submit to us for our approval. We have the right to modify your grand opening plan, in our sole discretion, and may require you to use a public relations firm to assist with your grand opening. The wages and other payroll-related expenses of your employees shall not be credited
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, employee wages and payroll-related expenses cannot be credited towards the $15,000 minimum grand opening advertising and promotion spending requirement. This grand opening spend must occur between 60 days before and 30 days after the studio opening, according to a plan submitted to Body20 for approval.
This means that franchisees must allocate a separate budget of at least $15,000 for grand opening advertising, independent of employee compensation. This ensures that the entire amount is used specifically for promotional activities to attract initial customers and build brand awareness in the local market.
Body20 retains the right to modify the franchisee's grand opening plan and may require the use of a public relations firm. Furthermore, if a franchisee fails to meet the pre-opening membership requirements, Body20 may require an additional $10,000 to be spent on grand opening advertising and promotion, bringing the total potential spend to $25,000. Body20 also has the option to manage the grand opening advertising and promotion on the franchisee's behalf, using the funds at their discretion.
Franchisees should carefully plan their grand opening advertising strategy and budget, ensuring compliance with Body20's requirements. Understanding what qualifies as an acceptable advertising expense is crucial to avoid any shortfalls and potential penalties.