How is the purchase price for the Purchased Assets of my Body20 studio determined?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
If we and you cannot agree on fair market value for the Purchased Assets, we will select an independent appraiser after consultation with you, and his or her determination of fair market value will be the final and binding purchase price.
- (d) Closing.
We will pay the purchase price at the closing, which will take place within 60 days after the purchase price is determined, although we may decide after the purchase price is determined not to complete the purchase.
We may set off against the purchase price, and reduce the purchase price by, any and all amounts you owe us or our Affiliates.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, the purchase price for the Purchased Assets will be the fair market value for use in the operation of a non-franchised Competitive Business, not as a Body20 studio. This means the valuation will exclude any value associated with the Body20 franchise itself, such as the brand's goodwill, trademarks, proprietary information, or participation in the Body20 network. The fair market value of the equipment, including exercise equipment and the Technology System, will be determined assuming a useful life of no more than three years.
If Body20 and the franchisee cannot agree on the fair market value, Body20 will select an independent appraiser after consulting with the franchisee. The appraiser's determination of fair market value will then be the final and binding purchase price. This process ensures an objective valuation in case of disagreement, though the franchisee has limited control over the appraiser selection.
Body20 has the option to deduct any amounts the franchisee owes to Body20 or its affiliates from the purchase price. The closing will occur within 60 days after the purchase price is determined, but Body20 reserves the right to decide not to complete the purchase even after the price is set. This clause introduces some uncertainty for the franchisee, as Body20 can withdraw from the purchase after the valuation is complete. At closing, the franchisee must deliver clear title to the Purchased Assets, free of liens and encumbrances, and transfer all assignable licenses and permits.