What rights do Body20 and its affiliates have within the Development Area during the term of the Development Agreement?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive an exclusive territory under the Development Agreement. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. If you (and your Affiliated Entities, as applicable) are fully complying with your (and their) obligations under the Development Agreement, the initial franchise agreement executed thereunder, and all other franchise agreements then in effect between us and you (and your Affiliated Entities, as applicable), during the term of the Development Agreement, we (and our affiliates) will not except with respect to Studios proposed to be located at or within "Non-Traditional Locations" establish or operate, or license third parties to establish or operate, Studios that have their physical locations within the Development Area. There are no other restrictions on our and our affiliates' activities in the Development Area during the term of the Development Agreement. We (and our affiliates) reserve the right without any restrictions whatsoever to pursue and establish, or franchise or license others to pursue and establish, Studios to be located at or within Non-Traditional Locations having their physical locations within the Development Area.
The location exclusivity described in the preceding paragraph (with the noted exception for Non-Traditional Locations) is the only restriction on our (and our affiliates') activities within the Development Area during the term of the Development Agreement. We and our affiliates have the right to engage, and license third parties to engage, in any other activities of any nature whatsoever within and throughout the Development Area, including, without limitation, the types of activities in which we and our affiliates reserve the right to engage (in a Studio's Territory) under Section 1.3 of the Franchise Agreement, as described above in this Item 12 under "Franchise Agreement - Limited Territorial Protection."
If any event of default occurs under the Development Agreement, in lieu of termination, we may at our option, and in our discretion, unilaterally modify the Development Area and/or modify the Development Schedule to decrease the number of Studios required to be developed under the Development Agreement by written notice to you, effective immediately upon receipt of our written notice to you. If we reduce your Development Area or your Development Schedule due to an event of default, we will not be obligated to refund any portion of the Development Fee to you.
Except as described above, (a) continuation of your territorial rights does not depend on your achieving a certain sales volume, market penetration, or other contingency, and you have no other options, rights of first refusal, or similar rights to acquire additional franchises; and (b) we do not have the right to alter your Development Area during the term of the Development Agreement.
Source: Item 12 — TERRITORY (FDD pages 49–53)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, a franchisee will not receive an exclusive territory under the Development Agreement. The franchisee may face competition from other franchisees, from outlets that Body20 owns, or from other channels of distribution or competitive brands that Body20 controls. However, if the franchisee is fully complying with their obligations under the Development Agreement, the initial franchise agreement executed thereunder, and all other franchise agreements then in effect between Body20 and the franchisee, during the term of the Development Agreement, Body20 and its affiliates will not establish or operate, or license third parties to establish or operate, Studios that have their physical locations within the Development Area, except with respect to Studios proposed to be located at or within "Non-Traditional Locations".
Body20 and its affiliates reserve the right without any restrictions whatsoever to pursue and establish, or franchise or license others to pursue and establish, Studios to be located at or within Non-Traditional Locations having their physical locations within the Development Area. The FDD specifies that the location exclusivity is the only restriction on Body20's and its affiliates' activities within the Development Area during the term of the Development Agreement. Body20 and its affiliates have the right to engage, and license third parties to engage, in any other activities of any nature whatsoever within and throughout the Development Area, including, without limitation, the types of activities in which Body20 and its affiliates reserve the right to engage (in a Studio's Territory) under Section 1.3 of the Franchise Agreement.
If an event of default occurs under the Development Agreement, Body20 may, at its option, unilaterally modify the Development Area and/or modify the Development Schedule to decrease the number of Studios required to be developed under the Development Agreement by written notice to the franchisee, effective immediately upon receipt of the written notice. If Body20 reduces the Development Area or the Development Schedule due to an event of default, Body20 will not be obligated to refund any portion of the Development Fee to the franchisee. Except as described above, Body20 does not have the right to alter the Development Area during the term of the Development Agreement.