Are Body20 franchise owners required to personally bind themselves to the non-compete agreement?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 12 (Noncompete Covenants) of the Initial Franchise Agreement is hereby incorporated by reference and shall apply under this Agreement to you and your Owners, except the post-term noncompete covenant in Section 12.2 (After Termination, Expiration, or Transfer) of the Initial Franchise Agreement shall apply to any Competitive Business that is located within (i) the Development Area, (ii) a 10-mile radius of the Development Area, or (iii) a 10-mile radius of the location of any other Studio that is operating or under development at the time of such expiration, termination, or transfer. The Owners must personally bind themselves to this Section 8 by signing our current form of Payment and Performance Guarantee, which is attached as Appendix B to this Agreement.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, franchise owners are required to personally bind themselves to the non-compete agreement. Specifically, the FDD states that owners must adhere to Section 8, which incorporates the noncompete covenants from Section 12 of the Initial Franchise Agreement. To ensure this adherence, owners must sign Body20's current Payment and Performance Guarantee form, which is included as Appendix B to the agreement.
This requirement has significant implications for prospective Body20 franchisees. It means that the individuals who own the franchise, especially in cases where the franchisee is a business entity, must personally commit to not competing with Body20, both during the franchise term and for a specified period after the agreement ends. This personal guarantee adds an extra layer of accountability, as the franchisor can pursue legal action against the individual owners, not just the business entity, if a breach of the non-compete agreement occurs.
The non-compete applies to any Competitive Business located within the Development Area, a 10-mile radius of the Development Area, or a 10-mile radius of any other operating or developing Body20 studio at the time of expiration, termination, or transfer. This broad geographic scope means owners need to be extremely careful about any business ventures they or their affiliated entities might consider, both during and after their time as Body20 franchisees.
Requiring personal guarantees for non-compete agreements is a fairly common practice in franchising. It protects the franchisor's brand, customer base, and proprietary information by preventing experienced franchisees from immediately opening competing businesses nearby. Prospective Body20 franchisees should carefully review the terms of the non-compete agreement and the Payment and Performance Guarantee to fully understand their obligations and potential liabilities.