Where can I find more information about inspections and audits obligations for a Body20 franchise?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 8 Records, Reports, Audits, and Inspections
8.1 Bookkeeping and Records. You agree to keep complete and accurate books, records, and accounts of all business conducted under this Agreement in accordance with generally accepted accounting principles. You must preserve all of your books and records in hard copy or in a format from which hard copies can be readily generated for at least five years from the date of preparation or such longer period as may be required by law. You must maintain such information and records on the Technology System as we may require from time to time in the Manuals and you acknowledge and agree that we will have access to that data remotely via
a network connection that we will specify. At our request, you must retain and use, at your expense, the services of an accountant or accounting firm that we approve.
- 8.2 Reports and Financial Statements. You agree to submit financial and operational reports and records to us at the times and in the manner specified in the Manuals. Upon our written request, by April 15 of each year, you must submit your balance sheet and income statement for the previous calendar year. With respect to your year-end income statement and balance sheet, you or the Operating Principal must certify that the income statement and balance sheet are correct and complete and that they have been prepared in accordance with generally accepted accounting principles. We have the right to demand audited financial statements if an Event of Default has occurred within the last calendar year. In addition, you must provide us within 15 days after our request, exact copies of federal and state income and other tax returns and any other forms, records, books, reports and other information that we periodically require relating to the Studio or you.
- 8.3 Additional Information. You shall respond promptly to requests from us for clarification and/or additional information regarding any matter entrusted to you under this Agreement. We may from time to time require information about your financial condition, earnings, sales, profits, costs, expenses, and performance to provide a basis for providing our prospective franchisees with information concerning actual or potential earnings or to comply with Applicable Laws governing the sale of franchises. You will provide such information promptly upon our request, and you will certify that such information is true and complete in all material respects.
8.4 Inspections and Right to Obtain Information.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 37–38)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, Section 8 of the franchise agreement outlines the franchisee's obligations regarding records, reports, audits, and inspections. Body20 requires franchisees to maintain complete and accurate books, records, and accounts of all business conducted under the agreement, following generally accepted accounting principles. These records must be preserved for at least five years in hard copy or a format that can readily generate hard copies. Franchisees must also maintain information and records on the Technology System as required in the manuals, with Body20 having remote access to this data via a specified network connection.
Body20 franchisees are obligated to submit financial and operational reports and records as specified in the manuals. Upon written request, franchisees must submit their balance sheet and income statement for the previous calendar year by April 15 of each year. The year-end income statement and balance sheet must be certified as correct and complete by the franchisee or the Operating Principal, confirming they were prepared in accordance with generally accepted accounting principles. Body20 retains the right to demand audited financial statements if an Event of Default has occurred within the last calendar year. Additionally, franchisees must provide exact copies of federal and state income and other tax returns, along with any other required forms, records, books, reports, and information relating to the Studio or the franchisee, within 15 days of the request.
Furthermore, Body20 franchisees must promptly respond to requests for clarification or additional information regarding any matter related to the agreement. Body20 may periodically request information about the franchisee's financial condition, earnings, sales, profits, costs, expenses, and performance to provide prospective franchisees with earnings information or to comply with applicable laws governing the sale of franchises. Franchisees must provide this information promptly and certify its truth and completeness. The FDD specifies that Body20 has the right to conduct inspections and obtain information, although the specific details of these inspections are not provided in this section. A prospective franchisee should consult the Body20 manuals for more detailed information.