Can Body20 require franchisees to purchase or lease Operating Assets from a single designated source?
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 mandate that franchisees purchase or lease furniture, fixtures, signs, and equipment, which are collectively referred to as "Operating Assets," from a single designated source. This designated source may include Body20 itself, its affiliates, or a buying cooperative organized by them.
This requirement extends to products, supplies, and services that franchisees purchase for resale or for use in their studios. These items must meet Body20's specifications, be of a specific brand, kind, or model, and be purchased or leased only from suppliers or service providers that Body20 has expressly approved. Body20 also has the right to change these specifications periodically and designate specific products or services as either optional or mandatory, with franchisees required to offer all mandatory items.
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, or designated suppliers, or in accordance with their specifications, ranges from 75% to 90% of the total cost to establish a studio. Furthermore, it is estimated that 30% to 45% of the total cost to operate a Body20 studio will be spent on these required purchases and leases. This means a significant portion of a franchisee's initial and ongoing investment is tied to Body20's approved or designated sources, giving Body20 considerable control over the franchisee's supply chain and potentially impacting profitability.