What happens if the Body20 franchisee does not pay the Brand Fund Fee on time?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee (2) | 8% of the Gross Sales of the Studio. | Currently due weekly by the 5th of each month (the "Payment Due Date") | See Note 2 for the definition of Gross Sales. |
| Brand Fund Fee | Currently, 2% of Gross Sales of the Studio. | The Payment Due Date | We have established and administer a Brand Fund and require you to contribute the Brand Fund Fee. We may increase the fee up to 4% of the Gross Sales of the Studio. See Note 2 for the definition of Gross Sales. |
Source: Item 6 — OTHER FEES (FDD pages 19–26)
What This Means (2025 FDD)
Based on the 2025 Body20 Franchise Disclosure Document, the FDD outlines the Brand Fund Fee, which is currently 2% of the studio's gross sales. This fee is due on the same date as the Royalty Fee, referred to as the "Payment Due Date." The document does not explicitly state the consequences of failing to pay the Brand Fund Fee on time.
However, it is common practice in franchising that late payments typically incur penalties. These penalties can include late fees, interest charges on the outstanding balance, and potentially, if the non-payment persists, more severe actions such as breach of contract notices or even termination of the franchise agreement. Franchise agreements usually contain clauses detailing the franchisor's remedies for a franchisee's failure to make timely payments.
Since the FDD does not specify the penalties for late payment of the Brand Fund Fee, it is important for a prospective Body20 franchisee to seek clarification from the franchisor regarding the specific repercussions of not meeting the payment deadlines. Understanding these potential penalties is crucial for managing the financial obligations of the franchise and avoiding potential disputes with Body20.