What is the role of Sequel Brands Holdings, LLC in relation to Body20's franchise agreement?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
We are affiliated with Sequel Brands Holdings LLC, a Delaware limited liability company ("Sequel Holdings"), which was formed on April 8, 2025. Sequel is the direct parent company to Sequel Holdings. Sequel Holdings guarantees our performance under our franchise agreements. Sequel Holdings shares our principal business address.
Attached as Exhibit C to this Disclosure Document is the audited balance sheet as of April 30, 2025, and the related statements of operations and member's equity, and cash flows for the period from April 8, 2025 (inception) through April 30, 2025 of our affiliate, Sequel Brands Holdings, LLC. Because Sequel Brands Holdings, LLC was organized in April 2025, it does not have available, and we cannot yet include, three full years of audited financial statements for Sequel Brands Holdings, LLC. Sequel Brands Holdings, LLC guarantees the performance of our obligations under the Franchise Agreement.
For value received, SEQUEL BRANDS HOLDINGS LLC, a Delaware limited liability company with a principal place of business at 4000 MacArthur Blvd., Suite 800, Newport Beach, California 92660 (the "Guarantor"), absolutely and unconditionally guarantees to assume the duties and obligations of BODY20 FRANCHISOR LLC, a Delaware limited liability company with a principal place of business at 4000 MacArthur Blvd., Suite 800, Newport Beach, California 92660 (the "Franchisor"), under (a) its franchise registration in each state where the franchise is registered and (b) its Franchise Agreement identified in its 2025 Franchise Disclosure Document, as it may be amended, and as such Franchise Agreement may be entered into with franchisees and amended, modified, or extended from time to time. This guarantee continues until (i) all such obligations of the Franchisor under its franchise registrations and the Franchise Agreement are satisfied or (ii) the liability of the Franchisor to its franchisees under the Franchise Agreement has been completely discharged, whichever first occurs. The Guarantor is not discharged from liability if a claim by a franchisee against the Franchisor remains outstanding. Notice of acceptance is waived. The Guarantor does not waive receipt of notice of default on the part of the Franchisor. This guarantee is binding on the Guarantor and its successors and assigns.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 74)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Sequel Brands Holdings, LLC ("Sequel Holdings") plays a significant role by guaranteeing Body20 Franchisor LLC's performance under its franchise agreements. This guarantee means that Sequel Holdings assures that Body20 will fulfill its duties and obligations to franchisees as outlined in the franchise agreement and state franchise registrations.
Specifically, Sequel Holdings absolutely and unconditionally guarantees to assume the duties and obligations of Body20 under (a) its franchise registration in each state where the franchise is registered and (b) its Franchise Agreement identified in its 2025 Franchise Disclosure Document, as it may be amended, and as such Franchise Agreement may be entered into with franchisees and amended, modified, or extended from time to time. This guarantee remains in effect until all obligations of Body20 under its franchise registrations and the Franchise Agreement are satisfied, or the liability of Body20 to its franchisees under the Franchise Agreement has been completely discharged, whichever occurs first.
This guarantee is a crucial protection for franchisees. It ensures that even if Body20 Franchisor LLC faces financial difficulties or other challenges, Sequel Brands Holdings, LLC, as the guarantor, will step in to fulfill the obligations to the franchisees. The guarantee remains binding on Sequel Brands Holdings, LLC and its successors and assigns, providing long-term security for the franchisees. The FDD also includes the audited balance sheet as of April 30, 2025, and the related statements of operations and member's equity, and cash flows for the period from April 8, 2025 (inception) through April 30, 2025 of Sequel Brands Holdings, LLC, attached as Exhibit C to the Disclosure Document.