Is Body20 obligated to establish a Brand Fund?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Fund Management. We may, but are not obligated to, establish the Brand Fund, a segregated or independent fund into which all Brand Fund Fees will be paid. In no event will we be deemed a fiduciary with respect to any Brand Fund Fees we receive or
administer. We are not required to have an independent audit of the Brand Fund completed. We will prepare an unaudited statement of contributions and expenditures for the Brand Fund and make it available within 60 days after the close of our fiscal year to franchisees that make a written request for a copy. 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, Body20 is not obligated to establish a Brand Fund. The document states that Body20 "may, but [is] not obligated to, establish the Brand Fund".
If Body20 establishes a Brand Fund, it will be a segregated or independent fund where all Brand Fund Fees are paid. Body20 states that they will not be considered a fiduciary with respect to any Brand Fund Fees they receive or administer. Furthermore, Body20 is not required to have an independent audit of the Brand Fund completed. However, Body20 will prepare an unaudited statement of contributions and expenditures for the Brand Fund and make it available to franchisees who request a copy in writing within 60 days after the close of their fiscal year. Any remaining funds at the end of the fiscal year will carry over to the next fiscal year.
Body20 has the right to direct all marketing programs and the use of the Brand Fund, including final decisions on creative concepts, materials, and media used in the programs. They may consult with a franchisee advisory council or a committee of franchisees regarding marketing programs, but the final decision-making authority rests with Body20. Franchisees should be aware that other franchisees may not be required to contribute to the Brand Fund, may contribute at a different rate, or may contribute to a different Brand Fund.