Is a Body20 franchisee required to pay a franchise fee for subsequent studios?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
liated Entity and all owners of a legal or beneficial ownership interest in the Affiliated Entity meet our then-current criteria for franchisees and franchisee owners; and (d) in addition to the guarantee requirements set forth in the applicable Franchise Agreement, you and all of your Owners sign a personal guarantee and agree to assume full and unconditional liability for, and agree to perform, all obligations, covenants and agreements contained in the Franchise Agreement.
2. Fees.
- 2.1 Franchise Fee. For each Studio that you develop pursuant to this Agreement, the initial franchise fee due under the applicable Franchise Agreement (the "Franchise Fee") for such Studio will be specified in Appendix A.
- 2.2 Development Fee. Upon execution of this Agreement, you must pay us a development fee in the amount specified on Appendix A (the "Development Fee"), which will be equal to 100% of the aggregate of all of the Franchise Fees due for the Studios that you commit to develop under this Agreement.
- 2.3 Application of Fee and Non-refundability. The Development Fee will be credited towards the Franchise Fee due for each Studio that you develop pursuant to this Agreement.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, franchisees who sign a Development Agreement are not required to pay an additional franchise fee for subsequent studios. The Development Agreement requires payment of a Development Fee equal to 100% of the aggregate franchise fees for all studios the franchisee commits to develop. This Development Fee is then credited towards the franchise fee due for each subsequent studio.
This means that while the franchisee pays upfront for the rights to develop multiple Body20 studios, they do not incur additional franchise fees as they open each subsequent location. However, the franchisee must sign the then-current Franchise Agreement for each additional studio, which may contain materially different terms, including different fees (excluding the franchise fee) and territorial rights, compared to the initial agreement.
It's important to note that the Development Fee is fully earned by Body20 upon signing the Development Agreement and is non-refundable, even if the franchisee does not develop all the studios outlined in the development schedule. Therefore, prospective franchisees should carefully consider their ability to meet the development schedule before entering into a Development Agreement with Body20.