How is the initial franchise fee for each Body20 studio determined under the Franchise Agreement?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.1 Franchise Fee. For each Studio that you develop pursuant to this Agreement, the initial franchise fee due under the applicable Franchise Agreement (the "Franchise Fee") for such Studio will be specified in Appendix A.
- 2.2 Development Fee. Upon execution of this Agreement, you must pay us a development fee in the amount specified on Appendix A (the "Development Fee"), which will be equal to 100% of the aggregate of all of the Franchise Fees due for the Studios that you commit to develop under this Agreement.
- 2.3 Application of Fee and Non-refundability. The Development Fee will be credited towards the Franchise Fee due for each Studio that you develop pursuant to this Agreement. Thus, there shall be no additional Franchise Fee due under each Franchise Agreement signed pursuant to this Development Agreement. The Development Fee is fully earned by us when we and you sign this Agreement and is non-refundable, even if you do not develop Studios in accordance with the Development Schedule.
3. Development Obligations.
3.1 Development of Studios.
- (a) Initial Studio. You must sign your Initial Franchise Agreement at the same time that you sign this Agreement and comply with the site selection procedures set forth in Section 4.1 (Site Selection) of the Initial Franchise Agreement.
- (b) Subsequent Studios. For each additional Studio that you have the right to develop in accordance with the Development Schedule, you must sign our then-current Franchise Agreement, which may have materially different terms than the Initial Franchise Agreement, including different fees (though no Franchise Fee shall be owed under such agremeent) and territorial rights. You must sign a Franchise Agreement for a Studio before you may execute a lease, sublease, or purchase agreement intended for such Studio or commence construction of such Studio. We will not be obligated to offer you a Franchise Agreement for a Studio unless:
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, the initial franchise fee for each studio is specified in Appendix A of the Franchise Agreement. For franchisees who sign a Development Agreement, a Development Fee is paid upfront, which is equal to 100% of the total franchise fees for all studios the franchisee commits to develop. This Development Fee is then credited towards the franchise fee for each individual studio, meaning no additional franchise fee is due when the franchisee signs a Franchise Agreement for each subsequent studio under the Development Agreement.
This fee structure has a few implications for prospective Body20 franchisees. If a franchisee plans to open multiple locations, they will pay the full franchise fee amount upfront as a Development Fee. This could be a significant initial investment, but it covers all franchise fees for the studios outlined in the development schedule. The initial franchise agreement must be signed at the same time as the development agreement.
It is important to note that for each additional studio a franchisee develops under the Development Schedule, they must sign Body20's then-current Franchise Agreement. The document states that these subsequent agreements may have materially different terms than the initial agreement, including different fees and territorial rights. However, the document specifies that no additional franchise fee will be owed under these subsequent agreements, as it is already covered by the Development Fee.
Prospective franchisees should carefully review Appendix A of the Franchise Agreement to understand the specific initial franchise fee amount. They should also consider the terms of the Development Agreement, including the development schedule and any potential changes in fees or terms for subsequent franchise agreements. Understanding these details is crucial for making an informed investment decision.