Can Body20 establish studios offering similar services under different names inside a franchisee's Body20 territory?

According to Body20's 2025 Franchise Disclosure Document, Body20 has the right to establish studios or businesses offering similar or identical services under names other than the Body20 marks, even within a franchisee's territory. This is a significant consideration for prospective franchisees as it means Body20 could potentially operate competing businesses nearby. However, this ability does not extend to operating under the Body20 brand itself within the franchisee's territory, offering some level of brand protection. The FDD also specifies that Body20 can establish studios or sessions operating under the Body20 marks and system at Non-Traditional Locations anywhere, including inside and outside the Territory. A Non-Traditional Location is a site that is located within a larger venue or facility that is likely to draw at least 75% of its customers from people who use such larger facility, including big box gyms and fitness facilities, cruise ships, military bases, college campuses, airports, sports or entertainment venues, hotels or resorts, theme parks, industrial or office complexes, train stations and other transportation facilities, travel plazas, casinos, hospitals, multi-unit residential properties, and other similar captive market locations.

This right is further clarified by stating that Body20 and its affiliates have the right to conduct any business activities, under any name, in any geographic area, regardless of the proximity to or effect on a franchisee's studio. This broad reservation of rights means that Body20 is not restricted from pursuing various business opportunities, even if they potentially impact a franchisee's business. The FDD does state that as long as the franchisee is in compliance with the Franchise Agreement, their exclusive rights in the Territory will not be modified for any reason, except by mutual written agreement signed by both parties.

Prospective franchisees should carefully consider the implications of these rights retained by Body20. While a franchisee is granted a Territory, Body20 retains considerable freedom to operate other businesses, including those that may compete, under different brand names. This is a fairly common practice in franchising, where franchisors often seek to diversify their revenue streams and maintain flexibility in responding to market changes. However, it is crucial for franchisees to understand the potential for competition from the franchisor itself and to assess the market conditions and competitive landscape in their Territory accordingly. Franchisees should also inquire about Body20's specific plans for alternative distribution channels or other business ventures that could impact their operations.