Does the purchase price for my Body20 studio's assets include the value of the franchise rights?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
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, the purchase price for a Body20 studio's assets does not include the value of the franchise rights. Specifically, when Body20 exercises its option to purchase the assets of a studio, the purchase price will be based on the fair market value for use in a non-franchised competitive business, not as a Body20 studio.
This valuation explicitly excludes any value attributed to the rights granted by the Franchise Agreement, goodwill associated with the Body20 marks, the brand image, proprietary information, or other intellectual property rights, or participation in the Body20 network of studios. This means that when determining the purchase price, the value of being part of the Body20 franchise system is not considered.
For a prospective franchisee, this is an important consideration because if Body20 decides to purchase the studio assets upon termination or expiration of the franchise agreement, the franchisee will not be compensated for the value of the Body20 franchise itself. The valuation focuses solely on the tangible assets and their worth in a generic, non-franchised business context. The FDD also specifies that for determining the fair market value of equipment, its useful life will be considered no more than three years, which could further impact the overall purchase price.