Does Body20 have the right to approve all transfers of the franchise?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
| | Our approval of transfer by franchisee | Section 13.3 | We have the right to approve all transfers, except for your grant of a security interest in the Site (if owned by you), the Studio, or any Operating Asset to a party providing financing for your acquisition, development, and/or operation of the Studio. | | m. | Conditions for our approval of transfer | Sections 13.4 and 13.5 | For a Control Transfer, you pay us pay us the Transfer Fee; all of your monetary obligations to us, our affiliates, and approved suppliers are satisfied; you and your affiliates are not in default of the Franchise Agreement or any Related Agreement; you and your Owners sign a general release; you and your Owners remain liable for obligations incurred or arising prior to transfer; you comply with noncompetition and confidentiality provisions; your landlord consents to the transfer of your lease; proposed transferee agrees to discharge all of your obligations; proposed transferee qualifies, meets training requirements, and signs then-current franchise agreement; proposed transferee upgrades the Studio to our then-current specifications; new franchisee covenants to continue to operate the Studio under the Marks; proposed transferee's owners execute our then-current form of personal guarantee; we determine purchase price acceptable and financing arrangements are subordinate to our interests; and you and your Owners and the proposed transferee and its owners sign our current form of consent to transfer agreement, which states the conditions with which you must comply to secure our consent to the proposed transfer. For any Transfer that does not result in a Control Transfer, in addition to any other conditions that we reasonably specify, you and/or your transferee must satisfy the conditions above, except for the requirements to obtain your landlord's consent, complete training, sign a new franchise agreement, and renovate the Studio. | | n. | Our right of first refusal to acquire franchisee's business | Section 13.9 | We can match any offer for your Studio, the Studio's assets, or any ownership interest, except for Transfers to an Entity under Section 13.7 of the Franchise Agreement (Permitted Transfers) or 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy). |
| l. | Our approval of transfer by franchisee | Section 7.1 | We have the right to approve or not approve all applicable transfers in our sole discretion. | | m. | Conditions for our approval of transfer | Section 7.1 | We may require you or the transferee to comply with any conditions that we specify, including payment of a transfer fee and execution of a general release. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 56–64)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 retains the right to approve all franchise transfers, with a limited exception. Specifically, Body20's approval is required for all transfers except when a franchisee grants a security interest in the Site, Studio, or Operating Assets to a financing provider. This provision is detailed in Section 13.3 of the Franchise Agreement.
For a 'Control Transfer,' which likely refers to a significant change in ownership or control, Body20 lists several conditions that must be met to gain approval. These conditions include paying a transfer fee, satisfying all monetary obligations to Body20 and its affiliates, ensuring neither the franchisee nor its affiliates are in default, obtaining a general release from the franchisee and its owners, and ensuring the proposed transferee meets Body20's qualifications and training requirements. The transferee must also sign the then-current franchise agreement and upgrade the studio to Body20's current specifications.
In cases of transfers that do not constitute a 'Control Transfer,' many of the same conditions apply, although some requirements like obtaining landlord consent, completing training, signing a new franchise agreement, and renovating the studio may be waived. Body20 also retains a right of first refusal, allowing it to match any offer for the Studio, its assets, or any ownership interest, except for specific permitted transfers or transfers upon death, incapacity, or bankruptcy.
For the Development Agreement, Body20 also maintains the right to approve or disapprove all applicable transfers at its sole discretion, as stated in Section 7.1. These transfers include the Development Agreement itself or any controlling equity interest in the franchisee entity. Body20 may also require the franchisee or transferee to comply with conditions such as paying a transfer fee and executing a general release. This level of control over transfers is common in franchising, as it allows Body20 to ensure that any new franchisees meet their standards and are capable of maintaining the brand's reputation and operational consistency.