Does the Body20 guarantee extend to modifications of the Development Agreement?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Defined Terms. All references to "Franchisor" in this Guarantee shall be deemed to include its Affiliates (as defined below), its successors, and its assigns.
All references to the "Development Agreement" in this Guarantee shall include all extension or modifications to such agreement.
All references to the "Initial Franchise Agreement" in this Guarantee refer to that certain Franchise Agreement dated the same date as the Development Agreement, pursuant to which Franchisor granted Franchisee the right to develop and operate one Studio (as defined below) in the Development Area (as defined below).
All capitalized terms not defined herein shall have the meanings given to them in the Initial Franchise Agreement.
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- Guarantee of Payment and Performance. The Guarantors jointly and severally unconditionally guarantee the full, prompt, and complete payment and performance when due, whether by acceleration or otherwise, of all obligations, indebtedness, and liabilities of Franchisee to Franchisor, direct or indirect, absolute or contingent, of every kind and nature, whether now existing or incurred from time to time hereafter, whether incurred pursuant to the Development Agreement or otherwise, together with any extension, renewal, or modification thereof in whole or in part (collectively, the "Guaranteed Liabilities").
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the guarantee provided by the guarantors extends to any modifications of the Development Agreement. The Payment and Performance Guarantee ensures that the guarantors are responsible for the franchisee's obligations to Body20, including any extensions, renewals, or modifications to the Development Agreement. This means that if the Development Agreement is altered in any way, the guarantee remains in effect, holding the guarantors accountable for the franchisee's performance under the revised terms.
Specifically, the guarantee covers the full, prompt, and complete payment and performance of all obligations, indebtedness, and liabilities of the franchisee to Body20. This includes any obligations incurred under the Development Agreement, as well as any extensions, renewals, or modifications to it. The guarantors agree to cover these guaranteed liabilities immediately if the franchisee fails to do so.
This provision protects Body20 by ensuring that the financial and performance obligations outlined in the Development Agreement are met, even if the agreement is changed after the initial signing. For a prospective franchisee, this highlights the importance of understanding the full scope of the Development Agreement and the potential liabilities, as the guarantee extends to any future modifications. Guarantors should be fully aware of their responsibilities and potential financial exposure, as they are guaranteeing the franchisee's performance under any version of the Development Agreement.