Must the Body20 Operating Principal have the power to bind the franchisee in all dealings with Body20?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
Your Operating Principal must have at least a 10% ownership interest in your Entity and must have authority over all business decisions related to your Studio and must have the power to bind you in all dealings with us. In addition, you must appoint a Designated Manager to manage the day-to-day business of your Studio, who may also be the Operating Principal. The Designated Manager is not required to have an ownership interest in your Entity. You must provide us with written notice of your Operating Principal and Designated Manager at least 60 days prior to opening and may not change your Operating Principal and Designated Manager without our prior approval.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 55)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, if the franchisee is an entity, the Operating Principal must have the power to legally bind the franchisee in all dealings with Body20. The Operating Principal must have at least a 10% ownership interest in the franchisee entity and must have authority over all business decisions related to the Body20 studio.
This requirement ensures that Body20 has a direct point of contact with sufficient authority to make decisions and fulfill obligations on behalf of the franchisee. It streamlines communication and accountability between the franchisee and Body20.
Furthermore, Body20 must receive written notice of the Operating Principal at least 60 days before the studio opens. The franchisee cannot change the Operating Principal without Body20's prior approval. This allows Body20 to vet and approve the individual who will represent the franchisee in all business matters, ensuring they meet the franchisor's standards.
In addition to the Operating Principal, a Designated Manager must be appointed to manage the day-to-day business of the studio. The Operating Principal can also serve as the Designated Manager. However, the Designated Manager is not required to have an ownership interest in the franchisee entity.