What is the Management Fee based on for Body20?
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, the Management Fee is applicable if Body20 exercises its right to manage a franchisee's studio under specific circumstances, such as replacing the designated manager, in cases of death, incapacity, or bankruptcy, or as a remedy for violations of the franchise agreement. It can also be applied if Body20 agrees to manage the studio at the franchisee's request.
The Management Fee is calculated as 10% of the studio's Gross Sales, in addition to Body20's direct out-of-pocket costs related to managing the studio. These costs include travel and living expenses for Body20's representatives.
This fee is separate from other fees due under the Franchise Agreement. This means that if Body20 takes over management of the studio, the franchisee will incur this additional expense on top of ongoing royalties, brand fund fees, and other financial obligations. This could significantly impact the profitability of the franchise during the period Body20 is managing the studio.