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What are the Body20 franchisee's obligations in Item 9 regarding the use of trademarks, considering the trademark rights granted in Item 13, and how does this relate to the restrictions on suppliers in Item 8?

Body20 Franchise · 2025 FDD

Answer from 2025 FDD Document

e the mystery shopper service on your behalf. If we engage the mystery shopper service on your behalf, you must pay us a fee that we will specify in the Manuals upon demand, which will not exceed 110% of our and our affiliates' actual costs and expenses. You must share the results of any mystery shopper program with us and must promptly address any deficiencies identified in any such report. You must follow any evaluation process, and use such evaluation forms, as we may from time to time require.

Section 9 Intellectual Property.

9.1 Marks and Trade Dress.

  • (a) Acknowledgements. You acknowledge that we or our Affiliates are the owner of the Marks and the Trade Dress, that you have no interest in the Marks and the Trade Dress beyond the nonexclusive License granted herein, and that, as between us and you, we have the exclusive right and interest in and to the Marks and the Trade Dress and the goodwill associated with and symbolized by them. Upon the expiration or termination of this Agreement, no monetary amount will be attributable to goodwill associated with your activities as a franchisee under this Agreement.
  • (b) Rights. Your right to use the Marks and the Trade Dress applies only to the Studio operated at the Site as expressly provided in this Agreement, including advertising related to the Studio. You may only use in your Studio the Marks and the Trade Dress we designate, and only in compliance with written rules that we prescribe from time to time. You may not use any Mark (i) as part of any corporate or legal business name, (ii) with any prefix, suffix or other modifying words, terms, designs or symbols (other than logos we have licensed to you), (iii) in selling any unauthorized services or products, (iv) as part of any domain name,

electronic address, metatag, social media account, or otherwise in connection with any website or other electronic medium without our consent, or (v) in any other manner we have not expressly authorized in writing. No materials on which any of the Marks or the Trade Dress appears will be used by you without our prior written approval, which may be revoked at any time upon reasonable notice to you. You must display the Marks in a manner that we specify on signage at the Studio and on all written materials, forms, advertising, promotional materials, supplies, employee uniforms, business cards, receipts, letterhead, contracts, stationary, and other materials we designate.

  • 9.2 Copyrights. You acknowledge that as between you and us, any and all present or future copyrights relating to the System or the Brand and related concept, including, but not limited to, the Manuals and marketing materials, (collectively, the "Copyrights") belong solely and exclusively to us. You have no interest in the Copyrights beyond the non-exclusive License granted in this Agreement.
  • 9.3 No Contesting Our Rights. During the Term of this Agreement and after its expiration or termination, you agree not to directly or indirectly contest our ownership, title, right or interest in or to, or our license to use, or the validity of, (i) the Marks, (ii) the Trade Dress, (iii) the Copyrights, or (iv) any trade secrets, methods, or procedures that are part of the System (collectively, the "Intellectual Property"), or contest our sole right to register, use, or license others to use the Intellectual Property.
  • 9.4 Changes to the Intellectual Property. We have the right, upon reasonable notice, to change, discontinue, or substitute for any of the Intellectual Property and to adopt entirely different or new Intellectual Property for use with the System without any liability to you, in our sole discretion. You agree to implement any such change at your own expense within the time we reasonably specify.
  • 9.5 Third-Party Challenges. You agree to notify us promptly of any unauthorized use of the Intellectual Property of which you have knowledge. You also agree to inform us promptly of any challenge by any person or Entity to the validity of, our ownership of, or our right to license others to use any of the Intellectual Property. We have the right, but no obligation, to initiate, direct, and control any litigation or administrative proceeding relating to the Intellectual Property, including any settlement. We will be entitled to retain any and all proceeds, damages, and other sums, including attorneys' fees, recovered or owed to us or our Affiliates in connection with any such action. You agree to execute all documents and render any other assistance we may deem necessary to any such proceeding or any effort to maintain the continued validity and enforceability of the Intellectual Property.
  • 9.6 Post-Termination or Expiration. Upon the expiration or termination of this Agreement for any reason, all of your rights to use the Intellectual Property will automatically revert to us without cost and without the execution or delivery of any document. Upon our request, you will execute all documents that we require to confirm such reversion.
  • 9.7 Innovations. All ideas, concepts, techniques, or materials relating to a Studio or the System (collectively, "Innovations"), whether or not protectable intellectual property and whether created by or for you or your Owners, employees, or contractors, must be promptly disclosed to us and will be deemed to be our sole and exclusive property, part of the System and the Intellectual Property, and works made-for-hire for us. To the extent any Innovation does not qualify as a work made-for-hire for us, by this Section, you assign ownership of that Innovation, and all related rights to that Innovation, to us and agree to sign (and to cause

your Owners, employees, and contractors to sign) whatever assignment or other documents we request to evidence our ownership or to help us obtain intellectual property rights in the Innovation. We and our Affiliates have no obligation to make any payments to you or any other person with respect to any Innovations. You may not use any Innovation in operating the Studio or otherwise without our prior approval.

Section 10 Proprietary Information.

  • 10.1 Receipt of Proprietary Information. You acknowledge that prior to or during the Term, we may disclose in confidence to you, either orally or in writing, certain trade secrets, know-how, and other confidential information relating to the System, our business, the businesses of our franchisees, our vendor relationships, our Sessions, or the construction, management, operation, or promotion of the Studio (collectively, "Proprietary Information"), including (i) site selection criteria and methodologies; (ii) methods, formats, systems, System Standards, sales and marketing techniques, knowledge and experience used in developing and operating Studios, including information in the Manuals; (iii) marketing research and promotional, marketing, advertising, public relations, customer relationship management and other brand-related materials and programs for Studios; (iv) knowledge of specifications for and suppliers of, and methods of ordering, certain items that Studios use and/or sell; (v) knowledge of the operating results and financial performance of other Studios; (vi) customer communication and retention programs, along with data used or generated in connection with those programs; and (vii) any other information we reasonably designate from time to time as confidential or proprietary. "Proprietary Information" does not include (a) information that is part of the public domain or becomes part of the public domain through no fault of you, (b) information disclosed to you by a third party having legitimate and unrestricted possession of such information, or (c) information that you can demonstrate by clear and convincing evidence was within your legitimate and unrestricted possession when the parties began discussing the sale of the franchise.
  • 10.2 Nondisclosure of Proprietary Information. We and our Affiliates own all right, title, and interest in and to the Proprietary Information. You will not, nor will you permit any person to, use or disclose any Proprietary Information (including without limitation all or any portion of the Manuals) to any other person, except to the extent necessary for your professional advisors and your employees to perform their functions in the operation of the Studio.

What This Means (2025 FDD)

According to Body20's 2025 Franchise Disclosure Document, Item 9 and related items outline the franchisee's obligations regarding trademarks and approved suppliers. The franchisee's right to use Body20's trademarks and trade dress is limited to the specific studio location and in compliance with Body20's written rules. The franchisee cannot use the trademarks in unauthorized ways, such as in a business name or domain name, without written consent. All materials displaying the trademarks must receive prior written approval from Body20, and the franchisee must display the marks as specified by Body20 on various materials, including signage, written materials, and uniforms. The franchisee acknowledges that Body20 owns all rights to the trademarks and trade dress. They must also notify Body20 of any potential infringement or unauthorized use of the marks. Body20 has the right to take action against infringements and control any related legal proceedings. If Body20 decides the franchisee should modify or discontinue using any marks, the franchisee must comply without reimbursement. The Development Agreement does not grant any rights to use the marks; these rights are only granted under the Franchise Agreement.

Item 8 details restrictions on the sources of products and services. Body20 has the right to require that all furniture, fixtures, signs, equipment, products, supplies, and services purchased by the franchisee meet Body20's specifications, be of a specific brand, kind, or model, and be purchased or leased only from approved suppliers or a designated single source. Franchisees must offer only approved products, services, and sessions and maintain a sufficient supply of required products. Body20 may require franchisees to use specific merchant processing services. All sessions must be conducted according to Body20's system standards, and any franchisee-developed sessions must be consistent with these standards.

These stipulations mean that a Body20 franchisee's use of the Body20 trademarks is highly controlled and subject to Body20's approval. The franchisee must adhere to strict guidelines regarding branding and marketing materials. Additionally, the franchisee's ability to choose suppliers is limited, as Body20 can mandate specific sources for various products and services. This control ensures brand consistency and quality but may also limit the franchisee's flexibility in sourcing materials and services. Body20 may also receive revenue from suppliers based on franchisee purchases, ranging from 5% to 30% of total purchases for certain items, which could influence the choice of suppliers. This arrangement was established in April 2025 when Body20 became the franchisor of the Brand.

In summary, a prospective Body20 franchisee should understand that they have a non-exclusive license to use Body20's trademarks, subject to numerous restrictions and Body20's control. They must also adhere to Body20's approved supplier list for various products and services, which may impact their costs and operational flexibility. These factors are crucial for assessing the overall investment and operational requirements of a Body20 franchise.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.