How does the Body20 franchise agreement's site approval process in Item 12 relate to the pre-opening obligations in Item 11?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]
ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING
Except as listed below, we are not required to provide you with any assistance.
Our Pre-Opening Obligations
For all Franchise Agreements, whether executed pursuant to a Development Agreement or otherwise, before you begin operating your Studio:
- 1. Designate Areas. We will designate your Site Selection Area. (Franchise Agreement - Section 1.1)
- 2. Site Selection. If you identify a site in the Site Selection Area that is reasonably suited for the conduct of the Studio and is consistent with any site selection guidelines that we may provide, before entering into any lease or purchase agreement for the site, you must submit a site proposal package describing details about the proposed site and provide any other information that we reasonably require. We will review each site that you identify and determine whether to accept it using our proprietary site selection assistance criteria, which may include evaluations of the proposed site by third-party site selection assistance software. We will conduct such on-site evaluation as we consider necessary and appropriate as part of our evaluation. We are not required to complete our review within a certain period of time. In addition to certain demographic characteristics, we also consider the following factors in accepting a Studio location: site visibility, zoning, parking, competition, neighboring tenants, accessibility, population density, and adjusted gross income. While we will provide assistance and guidance, it is solely your responsibility to select a suitable site for the Studio. Our acceptance of a proposed site is not a
warranty or representation of any kind as to the potential success or profitability of your Studio. (Franchise Agreement - Section 4.1)
- **3.
Site Acquisition.** Before you make a binding commitment to purchase, lease, or sublease a site, we must approve in writing the proposed lease or purchase agreement or any letter of intent between you and the third-party seller or lessor.
If you or your affiliate leases the site, unless we waive the requirement in writing, you must arrange for the execution of the Lease Rider in the form that is attached as Appendix D to the Franchise Agreement (the Franchise Agreement is attached as Exhibit A of this Disclosure Document) by you and your landlord .
[Item 12: TERRITORY]
ITEM 12 TERRITORY
Franchise Agreement
Site. Your franchise is for the specific Site that we approve. You must select a site that we have accepted within the non-exclusive Site Selection Area that we specify. Your Site Selection Area is not exclusive and is only intended to give you a general indication of the area within which you may locate the Site for the Studio. The site will be added to the Franchise Agreement once we accept it and you secure it.
Limited Territorial Protection. Once you have selected, and we have accepted, a Site in the Site Selection Area, and you have secured the Site, we will provide you an area in which you will have protected rights (the "Territory"). The size of your Territory may vary from the territory granted to other franchisees based on the location and demographics surrounding your Studio. Typically, the territory will be a geographic area encompassing (i) a population of approximately 50,000 people surrounding the applicable Studio or (ii) a two-mile radius from the front door of the Studio, whichever includes fewer people. However, in very high-density urban markets having a population above one million people, we might not provide any territory at all or might reduce the territory to no more than a city block. The sources we use to determine the population within your Territory will be publicly available population information (such as data published by the U.S. Census Bureau or other governmental agencies and commercial sources).
You will not receive an exclusive territory. You may face competition from other franchisees, outlets that we own, or other channels of distribution or competitive brands that we control.
Except as described below and for Non-Traditional Locations (defined below), we and our affiliates will not open, or license a third party to open, a Studio within your Territory. Except as stated in the preceding sentence, we and our affiliates have the right to conduct any business activities, under any name, in any geographic area, at any location, regardless of the proximity to or effect on your Studio. For example, we and our affiliates have the right to:
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the site approval process, detailed in Item 12, is directly linked to the pre-opening obligations outlined in Item 11. Item 11 specifies that Body20 will designate a Site Selection Area for the franchisee. The franchisee then identifies a potential site within this area and submits a site proposal package to Body20 for review. Body20 uses its proprietary site selection criteria, potentially including third-party software and on-site evaluations, to determine whether to accept the site. Factors considered include demographics, site visibility, zoning, parking, competition, neighboring tenants, accessibility, population density, and adjusted gross income.
Item 11 further states that before a franchisee makes any binding commitment to purchase, lease, or sublease a site, Body20 must provide written approval of the proposed lease or purchase agreement. Additionally, if the franchisee or an affiliate leases the site, they must arrange for the execution of a Lease Rider, included as Appendix D in the Franchise Agreement, by both the franchisee and the landlord, unless Body20 waives this requirement in writing. The franchisee must secure an accepted site by signing a Site Lease or purchase agreement within 90 days after the effective date of the Franchise Agreement, although Body20 may extend this deadline by up to 90 days, potentially requiring a general release from the franchisee as a condition.
Item 12 reinforces this process by stating that the Body20 franchise is for a specific site that Body20 approves within the non-exclusive Site Selection Area. Once Body20 accepts a site and the franchisee secures it, the site is added to the Franchise Agreement, and the franchisee receives a Territory. The size of the Territory is not uniform and depends on the location and demographics surrounding the studio, typically encompassing a population of approximately 50,000 people or a two-mile radius from the studio, whichever is smaller. In high-density urban areas, the territory might be reduced or eliminated entirely. The franchisee does not receive an exclusive territory and may face competition from other franchisees or channels.
The relationship between site approval and pre-opening obligations is crucial because the approval of the site by Body20 is a prerequisite for moving forward with many other pre-opening steps. Without site approval, the franchisee cannot finalize the lease or purchase, begin construction, or proceed with adapting the standard plans and specifications for the studio. If a franchisee fails to acquire an approved site by the Site Acquisition Deadline, Body20 has the right to terminate the Franchise Agreement. Therefore, securing site approval is a critical milestone in the pre-opening phase for a Body20 franchisee.