Can Body20 require franchisees to purchase specific brands of Operating Assets?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
6.8 Products, Supplies, Operating Assets, and Services.
- (a) Purchases. We have the right to require that products, supplies, Operating Assets, 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). To the extent that we establish specifications, require approval of suppliers or service providers, or designate specific suppliers or service providers for particular items or services, we will publish our requirements in the Manuals.
- (b) Products and Services You May Offer. You may offer in the Studio to customers only the products, services, and Sessions that we have approved 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, services, or Sessions that we designate as mandatory. You may sell products and services only in the varieties, forms, and packages that we have approved in accordance with our System Standards. You must maintain a sufficient supply of required products to meet the inventory standards we prescribe in the Manuals (or to meet reasonably anticipated customer demand, if we have not prescribed specific standards).
- (c) Revenue from Purchases. You acknowledge and agree that we and/or our Affiliates may derive revenue based on your purchases and leases, including from charging you for products and services we or our Affiliates provide to you and from promotional allowances, volume discounts, and other payments made to us by suppliers and/or distributors that we designate or approve for some or all of our franchisees. We and our Affiliates may use all amounts received from suppliers and/or distributors, whether or not based on your or other franchisees' actual or prospective dealings with them, without restriction for any purposes we or our Affiliates deem appropriate. If you derive any revenue based on payments or promotional allowances received from suppliers and/or distributors, you must report to us the details of the arrangement and such revenue shall be included as part of your Gross Sales.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 has the right to require franchisees to purchase or lease Operating Assets for use in their studio that meet certain criteria. These criteria include meeting specifications established by Body20, being a specific brand, kind, or model, being purchased or leased only from approved suppliers or service providers, or being purchased or leased only from a single source designated by Body20. This designated source may include Body20 itself, its affiliates, or a buying cooperative organized by them. Body20 will publish these requirements in its manuals.
This means that as a Body20 franchisee, you may be obligated to purchase specific brands or models of equipment and other operating assets from vendors that Body20 has pre-approved or designated. This could limit your options and potentially increase your costs, as you may not be able to shop around for the best deals or use your preferred suppliers. However, it also ensures consistency across all Body20 franchises, which can help maintain brand standards and quality.
Furthermore, the FDD states that Body20 and its affiliates may derive revenue from franchisee purchases and leases, including through markups on products and services they provide, as well as from promotional allowances, volume discounts, and other payments from designated or approved suppliers. Body20 can use these revenues without restriction for any purposes they deem appropriate. If a franchisee receives any revenue from suppliers or distributors, they must report the details to Body20, and this revenue will be included as part of their Gross Sales.