Are the fees outlined in the Body20 FDD Item 6 table refundable, and what payment methods are required?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTES:
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- All of the fees in the table above are imposed by us, payable to us, non-refundable (except for a portion of the Transfer Fee deposit, as described above), and are uniformly imposed. You must use the payment methods we designate. You must furnish us and your bank with any necessary authorizations to make payment by the methods we require.
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- "Gross Sales" means all revenue that you receive or otherwise derive from operating the Studio, whether from cash, check, credit or debit card, gift card or gift certificate, or other credit transactions, and regardless of collection or when you actually provide the products or services in exchange for the revenue. If you receive any proceeds from any business interruption insurance applicable to loss of revenue at the Studio, there shall be added to Gross Sales an amount equal to the imputed Gross Sales that the insurer used to calculate those proceeds. Gross Sales includes promotional allowances or rebates paid to you in connection with your purchase of products or supplies or your referral of customers. Gross Sales does not include (i) any bona fide returns and credits that are actually provided to customers and (ii) any sales or other taxes that you collect from customers and pay directly to the appropriate taxing authority. You may not deduct payment provider fees (i.e., bank or credit card company fees and gift card vendor fees) from your Gross Sales calculation.
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- In addition to applicable training and consulting fees, you are responsible for (a) any travel and living expenses (including meals, transportation, and accommodations), wages, and other expenses incurred by your trainees and (b) reimbursing us for any travel and living expenses incurred by our and our affiliates' employees or agents related to providing any additional training, remedial training, or consulting services at your Studio.
Source: Item 6 — OTHER FEES (FDD pages 19–26)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the fees listed in Item 6 are generally non-refundable, with a specific exception for a portion of the Transfer Fee deposit. The document specifies that Body20 dictates the acceptable payment methods, and franchisees must authorize payments through these designated methods with both Body20 and their bank. This blanket policy of non-refundability, except in the case of transfer fee deposits, means franchisees should carefully consider their financial commitments before paying any fees.
The Transfer Fee is applicable when a franchisee transfers any interest in their Franchise Agreement, entity, or Studio. The fee is structured as 25% of the then-current franchise fee for transfers resulting in a change of control, or $5,000 for other types of transfers. A "Control Transfer" is defined as a transfer of interest in the Franchise Agreement, the Studio's assets, more than 20% of the ownership interests, or any interests that result in a change of control. The Transfer Fee is split into two payments: 50% is due when the franchisee provides notice of the proposed transfer, and the remaining 50% is due when the transfer closes. If the transfer does not proceed, Body20 will refund the initial 50%, less any actual costs and expenses they incurred related to the proposed transfer. No Transfer Fee is due in the event of death, incapacity, or bankruptcy of any Owner.
This policy is fairly standard in the franchise industry, where initial fees and ongoing payments are typically non-refundable to cover the franchisor's administrative and support costs. The requirement to use specific payment methods and provide necessary authorizations is also common, ensuring that the franchisor can efficiently collect fees. The exception for the Transfer Fee deposit provides some financial protection to the franchisee if a transfer falls through, although Body20 retains the right to deduct their costs and expenses from the refund. Prospective Body20 franchisees should clarify what these costs and expenses might include to fully understand the potential refund amount.