What happens to any monies remaining in the Body20 Brand Fund at the end of a fiscal year?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
Brand Fund. We have established and administer a Brand Fund to which you must contribute up to 4% (currently, 2%) of Gross Sales. Under no circumstances will we be deemed a fiduciary with respect to any Brand Fund Fees we receive or administer. We are not required to have an independent audit of the Brand Fund completed, but, if we elect to do so, we may use Brand Fund monies to pay for the audit. We will prepare an unaudited statement of contributions and expenditures for the Brand Fund and make it available within 60 days after the close of our fiscal year to franchisees who make a written request for a copy. If any monies in the Brand Fund remain at the end of a fiscal year, they will carry-over in the Brand Fund into the next fiscal year. We or one of our affiliates may make or otherwise arrange loans to the Brand Fund in any year in which the balance of the Brand Fund is negative and charge a reasonable rate of interest. The amounts loaned to the Brand Fund will be repaid from future contributions to the Brand Fund in the year the loan is made or in subsequent years.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 38–49)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, any monies remaining in the Brand Fund at the end of a fiscal year will carry over into the next fiscal year. The Brand Fund is supported by franchisee contributions of up to 4% of Gross Sales (currently set at 2%).
Body20 may use the Brand Fund for various advertising, marketing, and promotional activities that benefit the brand and its studios. These activities include advertising campaigns, website maintenance, social media management, market research, and public relations. The company may also use the funds to cover salaries and benefits for marketing personnel, purchase promotional items, and cover administrative costs related to the Brand Fund.
Body20 does not guarantee that franchisees will benefit from the Brand Fund in proportion to their contributions. The franchisor will prepare an unaudited statement of contributions and expenditures for the Brand Fund, making it available to franchisees who request it within 60 days after the close of the fiscal year. This provides some transparency regarding how the funds are being managed and spent. The franchisor or its affiliates can also loan money to the Brand Fund if the balance is negative, charging a reasonable rate of interest, which will be repaid from future contributions.