What happens if the Body20 franchisee's Gross Sales are zero for a given period?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
orm for all franchisees and must be paid in a lump sum.
ITEM 6 OTHER FEES
OTHER FEES (Note 1)
| 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. |
| Marketing Spending Requirement | $1,500 per month | The Payment Due Date | You must spend the Marketing Spending Requirement on local advertising and promotional activities. Alternatively, we may require you to pay us the Marketing Spending Requirement, which we will use to conduct local advertising and promotional activities for your Studio on your behalf in a manner that we determine in our sole discretion. |
| Technology Fee | Currently, $1,060 per month. | The Payment Due Date. | The Technology Fee currently includes fees for various technology services that we will provide or arrange for third parties to provide, such as Studio systems, software and programming fees for electromagnetic stimulation suits, email services, and our intranet. We may add, delete, or otherwise modify the products and services that are included in the Technology Fee. You will begin paying the Technology Fee during your presale period, which will start three months prior to your opening date. We may increase the Technology Fee from time to time, provided that it will not exceed the greater of $2,500 per month or 2% of the Gross Sales of the Studio. The Technol |
Source: Item 6 — OTHER FEES (FDD pages 19–26)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, a franchisee's financial obligations extend beyond just royalty and brand fund fees, meaning that even with zero gross sales, certain fees still apply. The document specifies several fees that are not directly tied to gross sales, indicating that a Body20 franchisee will still have financial obligations even in periods where they have no revenue.
Specifically, the Marketing Spending Requirement is a fixed $1,500 per month, regardless of gross sales. The Technology Fee is also a fixed amount, currently $1,060 per month, and begins during the presale period, three months prior to opening. These fixed fees mean that a Body20 franchisee must have sufficient capital to cover these expenses even during periods of low or no sales.
Furthermore, the definition of "Gross Sales" is comprehensive, including all revenue received from operating the studio, whether in cash, credit, or other forms, and includes proceeds from business interruption insurance. This broad definition aims to capture all possible revenue sources when calculating fees based on gross sales. However, it's important to note that while royalty and brand fund fees are directly tied to gross sales (8% and 2% respectively), the franchisee is still responsible for the Marketing Spending Requirement and Technology Fee, irrespective of revenue. Therefore, a Body20 franchisee needs to be prepared to meet these obligations even during periods of zero gross sales.