Is the Body20 guarantee affected by the Franchisee's insolvency?

According to Body20's 2025 Franchise Disclosure Document, the Payment and Performance Guarantee remains effective regardless of the franchisee's insolvency. This means that even if the franchisee declares bankruptcy, undergoes reorganization, merges with another entity, or experiences a change in ownership, the guarantee remains in full effect. This provision protects Body20 by ensuring that the obligations outlined in the franchise agreement are still met, even if the original franchisee's financial situation changes.

The guarantee is designed to be irrevocable, absolute, and unconditional, remaining in effect until all guaranteed liabilities of the franchisee to Body20 and its affiliates are fully paid and satisfied, or until the Development Agreement and all obligations of the franchisee under that agreement expire. This comprehensive protection ensures that Body20's financial interests are safeguarded throughout the term of the agreement, irrespective of the franchisee's solvency.

Furthermore, the guarantors, by signing the guarantee, agree to waive certain rights, including notices of acceptance, creation of liabilities, and defaults. This waiver streamlines the enforcement process for Body20, allowing them to pursue the guarantors directly without needing to first engage with the franchisee or any other security. This clause reinforces the primary nature of the guarantee, making it a direct and enforceable obligation on the part of the guarantors, regardless of the franchisee's financial status or any changes in its corporate structure.