What is included in the Management Fee for Body20 if the franchisor manages the studio?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
If we exercise our right to manage your Studio as specified in Sections 6.2(c) (Replacement Designated Manager), 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy), or 14.2(b)(viii) (Other Remedies) or agree to manage your Studio at your request, you must pay us a management fee equal to 10% of your Gross Sales, plus our direct out-of-pocket costs related to such management (including the travel and living expenses of our representatives) (the "Management Fee").
The Management Fee is in addition to the other amounts due under this Agreement.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, if Body20 exercises its right to manage a franchisee's studio, or agrees to manage the studio at the franchisee's request, the franchisee must pay a Management Fee. This fee is equal to 10% of the studio's Gross Sales. In addition to the percentage of gross sales, the franchisee is responsible for Body20's direct out-of-pocket costs related to the studio's management. These costs include the travel and living expenses of Body20's representatives.
The Management Fee is in addition to any other amounts due under the Franchise Agreement. This means that even while Body20 is managing the studio, the franchisee is still responsible for other fees such as royalty fees, brand fund fees, and technology fees.
This arrangement could arise if the franchisee is unable to immediately appoint and train a Designated Manager, if there is a transfer upon death, incapacity, or bankruptcy, or as a remedy for violations of the Franchise Agreement. It is important for a prospective Body20 franchisee to understand the circumstances under which Body20 might manage their studio and the associated costs, as these can significantly impact the studio's profitability.