What should a Body20 franchisee do if they desire to make a transfer?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) You or your transferee must pay us the Transfer Fee;
(b) All of your accrued monetary obligations and all other outstanding obligations to us, our Affiliates, and approved suppliers shall be up to date, fully paid, and satisfied;
(c) You and your Affiliates must not be in default if any provision of this Agreement and any Related Agreements as of (i) the date of the request for our approval of the Transfer (or you must make arrangements satisfactorily to us to come into compliance by the date of the Transfer) and (ii) the date of the Transfer;
(d) You and your Owners must execute a general release, in a form that we prescribe, of any and all claims (to the extent permitted by Applicable Laws) against us, our Affiliates, and our and our Affiliates' past, present, and future officers, directors, mangers, members, equity holders, agents, and employees, including claims arising under Applicable Laws;
(e) You and your Owners must agree to remain liable for all of the obligations to us in connection with the Studio arising before the effective date of the Transfer and execute any and all instruments that we reasonably request to evidence such liability;
(f) You and your Owners must continue to be bound by the provisions of Sections 9 (Intellectual Property), 10 (Proprietary Information), 11 (Indemnification), and 12 (Noncompete Covenants) as if they were the Franchisee and this Agreement had expired or terminated as of the effective date of the Transfer;
(g) You must provide us with written notice from your landlord indicating that your landlord has agreed to transfer the Site Lease to your transferee;
(h) Your proposed transferee (or, if the transferee is not an individual, all owners of any legal or beneficial interest in the transferee) must demonstrate to our satisfaction that such transferee meets all of our then-current qualifications to become a franchisee, including not having any involvement with a Competitive Business.
If the transferee or its Affiliates already own a Studio, the transferee and its Affiliates must not be in default under any of their agreements with us or our Affiliates, must have a good record of customer service and compliance with our System Standards, and must, in our sole opinion, have sufficient financial and operational capacity to operate additional Studios;
(i) Your proposed transferee and their representatives must successfully complete our then-current training requirements at their expense;
(j) Your proposed transferee (and, if the transferee is not an individual, such owners of a legal or beneficial interest in the transferee as we may request) must (i) enter into a written assignment, in a form satisfactory to us, assuming and agreeing to discharge and guarantee all of your obligations under this Agreement and (ii) must execute our then-current form of personal guarantee;
(k) Your proposed transferee (and, if the transferee is not an individual, such owners of a legal or beneficial interest in the transferee as we may request) must execute, for a term ending on the last day of the existing Term and with such Successor Term as is provided by this Agreement, our then-current franchise agreement for new franchisees and such other agreements as we may require, which agreements will supersede this Agreement in all respects.
The terms of the new franchise agreement may differ significantly from the terms of this Agreement, including different fees.
The prospective transferee will not be required to pay any initial Franchise Fee;
(l) Your proposed transferee must make arrangements to modernize, renovate, or upgrade the Studio, at its expense, to conform to our then-current System Standards for new Studios;
(m) Your proposed transferee must covenant that it will continue to operate the Studio under the Marks and using the System;
(n) We must determine, in our sole discretion, that the purchase price and payment terms will not adversely affect the operation of the Studio.
If you or your Owners finance any part of the purchase price, you and they must agree that all obligations under promissory notes, agreements, or security interests reserved in the Studio will be subordinate to the transferee's obligation to pay all amounts due to us and our Affiliates and otherwise to comply with this Agreement; and
(o) You and your Owners and the transferee and its owners must execute a consent to Transfer agreement in a form that we prescribe that describes the conditions that must be complied with in order to obtain our consent to the Transfer.
13.5 Non-Control Transfers.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, a franchisee who wishes to transfer their franchise must meet several conditions to gain approval from Body20. The franchisee must first pay the transfer fee and ensure all monetary and outstanding obligations to Body20, its affiliates, and approved suppliers are current and satisfied. Additionally, the franchisee and their affiliates must not be in default of any agreement provisions, or they must make satisfactory arrangements to come into compliance by the transfer date. Both the franchisee and their owners must execute a general release of claims against Body20 and agree to remain liable for obligations arising before the transfer's effective date. They must also continue to adhere to intellectual property, proprietary information, indemnification, and noncompete covenants. The franchisee needs to provide written notice from their landlord confirming the lease transfer to the new franchisee.
Furthermore, the proposed transferee must meet Body20's qualifications, including not being involved with a competitive business and demonstrating sufficient financial and operational capacity. The transferee and their representatives must complete Body20's training program at their own expense. The transferee must also enter into a written assignment assuming all obligations under the Franchise Agreement and execute Body20's current form of personal guarantee. They must execute Body20's current franchise agreement for new franchisees, which may have different terms and fees, and arrange to modernize the studio to meet current system standards. The transferee must also covenant to continue operating the studio under Body20's marks and system.
Finally, Body20 must determine that the purchase price and payment terms will not adversely affect the studio's operation. If the franchisee or their owners finance any part of the purchase price, their obligations must be subordinate to the transferee's obligations to Body20. Both the franchisee, their owners, the transferee, and its owners must execute a consent to Transfer agreement outlining the conditions for obtaining Body20's consent. These stipulations ensure that any transfer maintains the integrity and standards of the Body20 franchise system.