Who pays the sales and transfer taxes when Body20 purchases the studio assets?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
At the closing, you agree to deliver instruments transferring to us: (x) good and merchantable title to the Purchased Assets, free and clear of all liens and encumbrances (other than liens and security interests acceptable to us), with all sales and transfer taxes paid by you; and (y) all of the Studio's licenses and permits which may be assigned or transferred.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, if Body20 purchases the assets of a studio, the franchisee is responsible for paying all sales and transfer taxes. Specifically, the franchisee must deliver instruments transferring good and merchantable title to the purchased assets, free and clear of all liens and encumbrances, with all sales and transfer taxes paid by them.
This means that when a franchisee sells their Body20 studio assets back to the franchisor, they must ensure that all applicable sales and transfer taxes are paid as part of the transaction. This could significantly impact the financial outcome of the sale for the franchisee, as these taxes can be a substantial expense.
It is important for prospective Body20 franchisees to understand this obligation, as it will affect their financial planning should they decide to sell their studio assets back to Body20. Franchisees should consult with a tax advisor to understand the potential tax implications of such a sale and to ensure compliance with all applicable tax laws.