Can Body20 require franchisees to lease specific supplies for their studio?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 8: RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES]
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Authorized Products and Services. We have the right to require that all furniture, fixtures, signs, and equipment (collectively, the "Operating Assets") and products, supplies, and services that you purchase for resale or purchase or lease for use in your Studio: (i) meet specifications that we establish from time to time; (ii) be a specific brand, kind, or model; (iii) be purchased or leased only from suppliers or service providers that we have expressly approved;
and/or (iv) be purchased or leased only from a single source that we designate (which may include us or our affiliates or a buying cooperative organized by us or our affiliates).
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Technology System. You are required to purchase most of the components of the Technology System that we specify from suppliers that we approve or designate, including the software, hardware (e.g., computer, tablets, and security cameras), and related equipment required to connect to our technology platform. If we require you to use any proprietary software or to purchase any software from a designated vendor, you must execute any software license agreements that we or the licensor of the software require and any related software maintenance agreements.
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Currently, we require you to purchase from us or our affiliates (i) the Initial FF&E Package, (ii) the Presale Kit, (iii) the Initial Retail Inventory Kit, (iv) certain ongoing equipment purchases, and (v) replacement inventory and sales materials and accessories. We reserve the right to designate us or our affiliates as approved or required suppliers of other goods or services in the future.
Currently, we require you to purchase from suppliers or service providers that we have designated or approved (i) certain other equipment and supplies, (ii) interior graphics and exterior signage, (iii) the Technology System, (iv) music licenses, and (v) payment processing services. We may require you to purchase other goods or services from approved or designated supplies or services providers in the future.
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Approval Process. If you would like to offer products or use any supplies, Operating Assets, or services that we have not approved or to purchase or lease from a supplier or service provider that we have not approved, you must submit a written request for approval and provide us with any information that we request. We have the right to inspect the proposed supplier's facilities and test samples of the proposed products and to evaluate the proposed service provider and the proposed service offerings. We may require the proposed supplier or service provider to visit our headquarters, currently, in Newport Beach, California, to evaluate the proposed supplier or service provider in person. You will pay us a charge that is equal to the greater of $1,000 or our and our affiliates' actual costs and expenses related to the inspection and/or testing the proposed product or evaluating the proposed service or service provider, including personnel and travel costs, whether or not the item, service, supplier, or service provider is approved. We have the right to grant, deny, or revoke approval of products, services, suppliers, or service providers based solely on our judgment. We will notify you in writing of our decision as soon as practicable following our evaluation. If you do not receive our approval within 30 days after submitting all of the information that we request, our failure to respond will be considered a disapproval of the request.
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We estimate that the cost to purchase and lease all equipment, inventory and other items and services that we require you to obtain from us or our affiliates, from designated suppliers, or in accordance with our specifications ranges from 75% to 90% of the total cost to purchase and lease equipment, inventory, and other items necessary to establish a Studio and 30% to 45% of the total cost to purchase and lease equipment, inventory, and other items to operate a Studio.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 32–37)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 has the right to mandate that franchisees purchase or lease furniture, fixtures, signs, equipment, products, supplies, and services that meet their established specifications. These items must be a specific brand, kind, or model and be purchased or leased exclusively from approved or designated suppliers, which may include Body20 or its affiliates.
The FDD specifies that franchisees are required to purchase most components of the Technology System from approved or designated suppliers, including software, hardware like computers and tablets, security cameras, and related equipment. Additionally, Body20 currently requires franchisees to purchase the Initial FF&E Package, the Presale Kit, the Initial Retail Inventory Kit, certain ongoing equipment purchases, and replacement inventory and sales materials and accessories from Body20 or its affiliates. Franchisees must also acquire certain other equipment and supplies, interior graphics, exterior signage, music licenses, and payment processing services from designated or approved suppliers.
Body20 estimates that the cost to purchase and lease all equipment, inventory, and other items and services that franchisees are required to obtain from Body20, its affiliates, designated suppliers, or according to Body20's specifications ranges from 75% to 90% of the total cost to establish a studio. Furthermore, it ranges from 30% to 45% of the total cost to operate a Body20 studio.
If a franchisee wishes to use products, supplies, Operating Assets, or services that have not been approved or to purchase or lease from a non-approved supplier, they must submit a written request for approval. Body20 has the right to inspect the supplier's facilities, test product samples, and evaluate service providers, potentially charging the franchisee the greater of $1,000 or the actual costs incurred for the inspection and evaluation. Approval can be granted, denied, or revoked at Body20's discretion.