During the period after the Body20 agreement expires but before the studio is purchased, can Body20 manage the studio themselves?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
rcially reasonable terms, which shall include the right to sublease the Site to another party. You and your Owners agree to cause your Affiliate or any Entity controlled by such Owner to comply with these requirements. If a Franchisee Party leases the Site from an unaffiliated lessor, you agree (at our option) to cause the Franchisee Party to assign the Site Lease to us or to enter into a sublease for the remainder of the Site Lease term on the same terms (including renewal options) as the Lease.
- (b) Operations Pending Purchase. If we do not exercise our right to operate the Studio, we may require you to continue to operate the Studio in accordance with this Agreement during the period between the expiration or termination of this Agreement through (i) the date on which we decide to decline our right to exercise this option (or the expiration of the option, if we fail to provide an Exercise Notice by the deadline) or (ii) the closing of our purchase. However, we may, at any time during that period, assume the management of the Studio ourselves or appoint a third party (who may be our Affiliate) to manage the Studio pursuant to the terms of Section 15.6 (Our Right to Operate).
- (c) Purchase Price. The purchase price for the Purchased Assets will be their fair market value for use in the operation of a non-franchised Competitive Business (and not a Studio). However, the purchase price will not include any value for any rights granted by this Agreement, goodwill attributable to the Marks, our brand image, any Proprietary Information or our other intellectual property rights, or participation in the network of Studios. For purposes of determining the fair market value of all equipment (including the exercise equipment and Technology System) used in operating the Studio, the equipment's useful life shall be determined to be no more than three years.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 has the right to manage the studio themselves or appoint a third party to manage it during the period between the expiration or termination of the agreement and the purchase of the studio. This is applicable if Body20 does not exercise their right to operate the studio.
This means that if a franchisee's agreement expires or is terminated, Body20 can step in to manage the studio to ensure continuous operation. This can occur while Body20 decides whether to purchase the studio assets. The franchisee must vacate the studio promptly and assist Body20 in taking possession and assuming operations. The franchisee will not be entitled to any revenue earned during this period of Body20's operation.
Body20's right to operate the studio continues until they either decline or fail to timely exercise their option to purchase the studio, or until they exercise their option to purchase the studio and the purchase is completed. Body20 also has the right to assign or delegate this right to operate the studio to an affiliate or third party. Even if the franchisee disputes the termination or the decision not to grant a successor term, Body20 retains the option to operate the studio pending the final determination of the dispute.