Can Body20 require franchisees to purchase or lease Operating Assets only from a buying cooperative organized by Body20 or its affiliates?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
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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).
You must offer to customers only the products, services, and Sessions we approve in writing. In addition, you must offer the specific products, services, and Sessions that we require in the Manuals or otherwise in writing. We may change these specifications periodically, and we may designate specific products or services as optional or mandatory. You must offer all products or services that we designate as mandatory.
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 require franchisees to purchase or lease furniture, fixtures, signs, and equipment, which are collectively referred to as "Operating Assets", from a single source that they designate. This designated source may include Body20 or its affiliates, or even a buying cooperative organized by Body20 or its affiliates.
This means that as a Body20 franchisee, you might be obligated to obtain your Operating Assets from a specific, pre-approved source, which could be Body20 itself, its affiliates, or a cooperative they organize. This requirement ensures uniformity and quality control across all Body20 franchise locations, but it also limits your ability to shop around for potentially better deals or preferred vendors.
Furthermore, 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 or its affiliates, from designated suppliers, or in accordance with their 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. This indicates a significant portion of your initial and ongoing costs will be dictated by Body20's approved suppliers and specifications. As a prospective franchisee, it is important to evaluate the potential financial implications of these purchasing restrictions and consider how they might affect your profitability and operational flexibility.