factual

Does Body20 have any pre-opening obligations to the franchisee?

Body20 Franchise · 2025 FDD

Answer from 2025 FDD Document

M 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING**

Except as listed below, we are not required to provide you with any assistance.

Our Pre-Opening Obligations

For all Franchise Agreements, whether executed pursuant to a Development Agreement or otherwise, before you begin operating your Studio:

  • 1. Designate Areas. We will designate your Site Selection Area. (Franchise Agreement - Section 1.1)
  • 2. Site Selection. If you identify a site in the Site Selection Area that is reasonably suited for the conduct of the Studio and is consistent with any site selection guidelines that we may provide, before entering into any lease or purchase agreement for the site, you must submit a site proposal package describing details about the proposed site and provide any other information that we reasonably require. We will review each site that you identify and determine whether to accept it using our proprietary site selection assistance criteria, which may include evaluations of the proposed site by third-party site selection assistance software. We will conduct such on-site evaluation as we consider necessary and appropriate as part of our evaluation. We are not required to complete our review within a certain period of time. In addition to certain demographic characteristics, we also consider the following factors in accepting a Studio location: site visibility, zoning, parking, competition, neighboring tenants, accessibility, population density, and adjusted gross income. While we will provide assistance and guidance, it is solely your responsibility to select a suitable site for the Studio. Our acceptance of a proposed site is not a

warranty or representation of any kind as to the potential success or profitability of your Studio. (Franchise Agreement - Section 4.1)

  • 3. Site Acquisition. Before you make a binding commitment to purchase, lease, or sublease a site, we must approve in writing the proposed lease or purchase agreement or any letter of intent between you and the third-party seller or lessor. If you or your affiliate leases the site, unless we waive the requirement in writing, you must arrange for the execution of the Lease Rider in the form that is attached as Appendix D to the Franchise Agreement (the Franchise Agreement is attached as Exhibit A of this Disclosure Document) by you and your landlord . Our review of the Site lease or sublease (the "Site Lease") is for our own benefit only and is not intended to supplement or replace a review by your attorney. We may require you to engage an attorney to review your Site Lease or purchase agreement for the Site that we have accepted and to supply us with reasonable documentation relating to that review, including a lease abstract and confirmation that the terms in the agreement reflect the terms in any letter of intent between you and the third-party seller or lessor. You must secure a site that we have accepted by signing a Site Lease or purchase agreement within 90 days after the effective date of your Franchise Agreement (the "Site Acquisition Deadline"). We may extend the Site Acquisition Deadline by up to 90 days in our sole discretion, and we may require you to execute a general release as a condition of our agreeing to grant such extension.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 38–49)

What This Means (2025 FDD)

According to Body20's 2025 Franchise Disclosure Document, Body20 has several pre-opening obligations to franchisees. Body20 will designate the Site Selection Area for the franchisee. Body20 also provides a review of the franchisee's proposed site, using its own criteria, which includes on-site evaluations. However, the FDD states that it is solely the franchisee's responsibility to select a suitable site for the Body20 studio.

Before the franchisee makes any binding commitment to purchase, lease, or sublease a site, Body20 must approve in writing the proposed lease or purchase agreement or any letter of intent between the franchisee and the third-party seller or lessor. Unless Body20 waives the requirement in writing, the franchisee must arrange for the execution of the Lease Rider by the franchisee and their landlord if the franchisee or their affiliate leases the site.

Body20 also requires the franchisee to meet certain pre-opening requirements before Body20 approves the studio opening. These requirements include providing a certificate of occupancy, building the studio in compliance with approved plans, ensuring initial employees meet training requirements, and meeting a minimum of 100 pre-opening members or memberships that will generate at least $20,000 in recurring monthly Gross Sales. The aim is for these pre-sold memberships to start immediately upon the studio's opening. Franchisees must also spend a minimum of $15,000 for grand opening advertising and promotion beginning at least 60 days before, and ending 30 days after, the opening of their studio under a plan submitted to Body20 for approval.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.