Must all outstanding obligations to Body20's affiliates be satisfied for a Control Transfer?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) All of your accrued monetary obligations and all other outstanding obligations to us, our Affiliates, and approved suppliers shall be up to date, fully paid, and satisfied;
(c) You and your Affiliates must not be in default if any provision of this Agreement and any Related Agreements as of (i) the date of the request for our approval of the Transfer (or you must make arrangements satisfactorily to us to come into compliance by the date of the Transfer) and (ii) the date of the Transfer;
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, a franchisee seeking a Control Transfer must ensure that all outstanding obligations to Body20, its affiliates, and approved suppliers are fully paid and up to date. This requirement is a prerequisite for Body20's approval of the transfer.
Specifically, the franchisee and its affiliates must not be in default of any provision within the Franchise Agreement or any related agreements. This condition must be met both at the time the transfer approval is requested and on the actual date of the transfer. However, Body20 may allow the franchisee to make arrangements to come into compliance by the transfer date.
This stipulation protects Body20 and its network by ensuring that new franchisees are not burdened with the financial liabilities of the previous owner. It also maintains the financial health and stability of the Body20 system. A prospective franchisee should carefully review all outstanding financial and contractual obligations before initiating a transfer to avoid potential delays or disapproval.