What happens if the proposed transferee for a Body20 franchise is not an individual?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
(j) Your proposed transferee (and, if the transferee is not an individual, such owners of a legal or beneficial interest in the transferee as we may request) must (i) enter into a written assignment, in a form satisfactory to us, assuming and agreeing to discharge and guarantee all of your obligations under this Agreement and (ii) must execute our then-current form of personal guarantee;
(k) Your proposed transferee (and, if the transferee is not an individual, such owners of a legal or beneficial interest in the transferee as we may request) must execute, for a term ending on the last day of the existing Term and with such Successor Term as is provided by this Agreement, our then-current franchise agreement for new franchisees and such other agreements as we may require, which agreements will supersede this Agreement in all respects.
The terms of the new franchise agreement may differ significantly from the terms of this Agreement, including different fees.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, if the proposed transferee is not an individual, specific requirements apply to the owners of the legal or beneficial interest in the transferee. These owners must meet certain obligations to be approved for the transfer.
Specifically, Body20 requires that the owners of the legal or beneficial interest in the transferee (if the transferee is not an individual) must enter into a written assignment. This assignment, in a form satisfactory to Body20, requires them to assume, discharge, and guarantee all of the original franchisee's obligations under the Franchise Agreement. Additionally, these owners must execute Body20's then-current form of personal guarantee.
Furthermore, the owners of the non-individual transferee must execute Body20's then-current franchise agreement for new franchisees, along with any other agreements Body20 requires. These agreements will be for a term ending on the last day of the existing term, including any successor terms provided by the agreement, and will supersede the original agreement in all respects. It's important to note that the terms of the new franchise agreement may differ significantly from the original agreement, potentially including different fees. Therefore, prospective franchisees should carefully consider these implications when transferring to a non-individual entity.