Is the Body20 Royalty Fee paid in exchange for services rendered by the franchisor?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
3.2 Royalty Fee.
(a) Amount of Royalty Fee. You must pay us a weekly royalty fee (the "Royalty Fee") equal to 8% of your Gross Sales (as defined in Section 3.2(b)) for the previous week. The Royalty Fee is non-refundable and is paid in consideration of the ongoing right to use
the Marks and the System in accordance with this Agreement and not in exchange for services rendered by us.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, the Royalty Fee is not paid in exchange for services rendered by the franchisor. Instead, the weekly Royalty Fee is paid for the ongoing right to use the Body20 Marks and System.
The Royalty Fee is 8% of the franchisee's Gross Sales for the previous week. Gross Sales include all revenue received from operating the studio, whether from cash, credit card, or other transactions, and includes proceeds from business interruption insurance related to revenue loss. Gross Sales does not include bona fide returns and sales taxes collected and remitted to the appropriate authority.
This means that Body20 franchisees must pay the 8% Royalty Fee regardless of any specific services they receive from the franchisor during that period. The fee is for the right to operate under the Body20 brand and utilize its established system. This is a common arrangement in franchising, where royalty fees compensate the franchisor for the ongoing use of their intellectual property and brand recognition.