What happens to any remaining monies in the Body20 Brand Fund at the end of a fiscal year?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
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 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, any remaining funds in the Brand Fund at the end of a fiscal year will be carried over into the Brand Fund for the subsequent fiscal year. This means that the contributions made by franchisees, which can be up to 4% of gross sales, are not lost at the end of the year but are retained for future use in activities that Body20 believes will benefit the brand or its studios.
This carry-over provision ensures that the Brand Fund has a continuous pool of resources to support ongoing and future marketing and promotional efforts. Body20 may also arrange loans to the Brand Fund if the balance is negative, charging a reasonable interest rate, which will be repaid from future contributions. This financial management approach aims to maintain a stable and effective Brand Fund.
For a prospective Body20 franchisee, this is beneficial because it suggests that the marketing funds are managed with a long-term perspective. The franchisee can expect that their contributions will accumulate and be used strategically over time, rather than being depleted annually. However, franchisees should be aware that Body20 is not obligated to act as a fiduciary with respect to the Brand Fund and is not required to have an independent audit completed.