Can Body20 require me to obtain non-disclosure and non-compete agreements from officers, directors, Designated Managers, fitness coaches, owner's spouses, and other individuals?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
We may also require you to obtain from your officers, directors, Designated Managers, fitness coaches, your Owner's spouses (to the extent that they are not required to sign the Guarantee (as defined below)), and other individuals that we may designate executed agreements containing nondisclosure and noncompete covenants in a form acceptable to us, such as the form attached as Exhibit H, which specifically identify us as having the independent right to enforce them.
If you are an Entity, each Owner, including the Operating Principal, and his/her spouse (as applicable) must sign the Payment and Performance Guarantee (the "Guarantee") attached to the Franchise Agreement, assuming and agreeing to discharge all obligations of the franchisee under the Franchise Agreement and agreeing to comply with the confidentiality, indemnification, covenant not to compete, and assignment provisions of the Franchise Agreement. If you are a party to a Development Agreement, each individual or Entity that has a legal and/or beneficial interest in you must sign the Payment and Performance Guarantee attached to the Development Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 55)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 has the right to require franchisees to obtain executed agreements containing non-disclosure and non-compete covenants from certain individuals. These individuals may include the franchisee's officers, directors, Designated Managers, fitness coaches, and the franchisee owner's spouses. These agreements must be in a form acceptable to Body20, such as the form attached as Exhibit H, and must specifically identify Body20 as having the independent right to enforce them.
This requirement ensures that Body20 can protect its confidential information and trade secrets, as well as enforce non-compete obligations directly with individuals who have access to sensitive information or who could potentially compete with the Body20 system. By having these agreements in place, Body20 aims to maintain the integrity of its brand and protect its market position.
For a prospective Body20 franchisee, this means they need to be prepared to ensure that the specified individuals are willing to sign these agreements as a condition of their involvement with the franchise. The franchisee should carefully review Exhibit H to understand the scope and terms of the non-disclosure and non-compete covenants. Additionally, if the franchisee is an entity, each Owner, including the Operating Principal, and their spouse (if applicable) must sign a Payment and Performance Guarantee, which includes compliance with confidentiality, indemnification, covenant not to compete, and assignment provisions of the Franchise Agreement.