For Body20, can revenue be derived from promotional allowances and volume discounts paid to the franchisor by suppliers?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
ducts 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.
(d) Approval Process.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 and its affiliates may receive revenue from a franchisee's purchases and leases. This includes revenue from charging the franchisee for products and services, as well as from promotional allowances, volume discounts, and other payments made to Body20 by suppliers or distributors that Body20 designates or approves for its franchisees.
Body20 and its affiliates can use these supplier payments without any restrictions for any purposes they deem appropriate. However, if a Body20 franchisee receives any revenue from payments or promotional allowances from suppliers or distributors, the franchisee must report the details of the arrangement to Body20. This revenue must then be included as part of the franchisee's Gross Sales.
Gross Sales for Body20 include all revenue received from operating the studio, whether in cash, credit, or other forms, and includes promotional allowances or rebates connected to the franchisee's purchase of products/supplies or customer referrals. This means that while Body20 benefits directly from supplier payments, franchisees must also account for any supplier-related revenue they receive when calculating their Gross Sales, which affects their royalty payments to Body20.