Are Body20 franchisees and their owners required to remain liable for obligations arising before a Control Transfer?

According to Body20's 2025 Franchise Disclosure Document, franchisees and their owners must agree to remain liable for all obligations to Body20 in connection with the studio that arise before the effective date of a transfer. They must also execute any instruments that Body20 reasonably requests to evidence this liability. This requirement is part of the conditions that must be met for Body20 to approve a transfer of the franchise.

This means that if a franchisee wants to sell their Body20 franchise, they cannot simply walk away from any outstanding debts or obligations that were incurred before the sale. Both the franchisee and their owners must sign agreements ensuring they remain responsible for these pre-existing liabilities. This protects Body20 from potential losses if the new franchisee is unable or unwilling to cover those prior obligations.

This condition is relatively common in franchising, as franchisors want to ensure financial stability and continuity within their system. By requiring the seller to remain liable for past obligations, Body20 reduces the risk of inheriting financial problems with a new franchisee. Prospective Body20 franchisees should carefully consider this requirement and ensure they are fully aware of all outstanding obligations before attempting to transfer their franchise.