Does the Body20 Franchise Agreement specify any financial thresholds that must be met for renewal or extension?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
L, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION**
THE FRANCHISE RELATIONSHIP
The table below lists certain important provisions of the Franchise Agreement. You should read these provisions in the form of Franchise Agreement attached to this Disclosure Document as Exhibit A.
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Sections 2.1 and 2.3 | Begins on the effective date of your Franchise Agreement and continues for 10 years from the date you open your Studio for business. If you continue operating after expiration, we may treat the term as extended on a month-to month basis until either we or you deliver notice ending that extension, in which case that interim period will terminate 30 days after the other party's receipt of the notice to terminate the interim period. |
| b. | Renewal or extension of the term | Section 2.2 | If you meet the conditions, you may obtain two additional consecutive successor terms of five years each. |
| c. | Requirements for franchisee to renew or extend | Section 2.2 | You have notified us of your intent to renew at least six months in advance but no more than 12 months in advance; you and your Owners (as applicable) have signed and returned to us the successor franchise agreement, owner's guaranty, and ancillary agreements (modified as we consider necessary to reflect changes that we consider appropriate for the successor term), which may have materially different terms and conditions than your original Franchise Agreement; you have refurbished or renovated the Studio to our then-current specifications; you and your Owners have executed a general release in favor of us and our affiliates; you have completed, and have had your Operating Principal and Designated Manager complete, our then-current training requirements; you have secured from your landlord the right to continue operating at the Site for the remainder of the successor term; you, your Owners, and your affiliates (the ("Franchisee Parties") have fully complied with the Franchise Agreement and all other agreements between any Franchisee Party and us, our affiliates, and/or our approved vendors related to the Studio or any other Studios (each, a "Related Agreement"); at the time you provide notice of your intent to enter into a successor term and at the expiration of the then-current term of the Franchise Agreement, the Franchisee Parties are in full compliance with all Related Agreements; and you have paid us the Successor Fee. |
| d. | Termination by franchisee | Section 14.3 | If we commit a material breach of the Franchise Agreement and we fail to cure the breach or take reasonable steps to begin curing the breach within 60 days after receiving notice from you, you may terminate the Franchise Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 56–64)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, there are no explicit financial thresholds that must be met for renewal or extension of the franchise term. However, the document outlines several conditions that a franchisee must meet to be eligible for two additional consecutive successor terms of five years each.
These conditions include notifying Body20 of the intent to renew within a specified timeframe, signing and returning the successor franchise agreement and related documents, refurbishing the studio to current specifications, executing a general release in favor of Body20, completing required training, securing the right to continue operating at the site, and fully complying with the Franchise Agreement and all other related agreements. The franchisee must also pay the Successor Fee to Body20.
While no specific dollar amounts or financial performance metrics are mentioned in the context of renewal requirements, the franchisee's compliance with all agreements, including financial obligations, is a prerequisite. Additionally, failure to meet Minimum Sales Levels for two consecutive calendar years is defined as a non-curable default that could lead to termination of the agreement. Therefore, while not directly stated as a renewal requirement, maintaining adequate sales levels is crucial for the overall health of the franchise and its eligibility for renewal.
Prospective Body20 franchisees should carefully review Section 2.2 and Section 14.1 of the Franchise Agreement to fully understand the conditions for renewal and the potential causes for termination. It would be prudent to discuss with Body20 the specific expectations for financial performance and the calculation of the Successor Fee to ensure a clear understanding of the requirements for a successful franchise renewal.