Instead of terminating the Development Agreement, what other remedies does Body20 have if an Event of Default occurs under Section 6.1?

According to Body20's 2025 Franchise Disclosure Document, besides terminating the Development Agreement, Body20 has other options if an Event of Default occurs under Section 6.1. Body20 can modify the Development Area and/or the Development Schedule. This modification would decrease the number of Studios required to be developed under the agreement. Body20 must provide written notice to the franchisee, and the modification becomes effective immediately upon receipt of the notice.

It is important to note that if Body20 reduces the Development Area or the Development Schedule due to an Event of Default, the franchisee will not be entitled to a refund of any portion of the Development Fee. This means the franchisee could end up paying the same fee for a smaller territory or fewer studios.

This clause in the Development Agreement allows Body20 flexibility in addressing defaults without resorting to immediate termination. However, it also carries financial risks for the franchisee, who could lose territory or development rights without compensation. Prospective franchisees should carefully consider these implications and seek legal counsel to fully understand their rights and obligations under the Development Agreement.