Does Sequel Brands' officer owning interest in Body20 create any restrictions on suppliers?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
One of Sequel Brands' officers owns an interest in us and our affiliates, and we are a supplier with whom you are required to do business. None of our or Sequel Brands' officers own an interest in any unaffiliated suppliers with whom you are required or recommended to do business.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 32–37)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, a Sequel Brands officer's ownership interest in Body20 and its affiliates does create a situation where franchisees are required to conduct business with a supplier in which an officer has a vested interest. Specifically, Body20 franchisees are required to purchase certain items from Body20 or its affiliates. However, the document explicitly states that neither Body20 nor Sequel Brands' officers have ownership interests in any unaffiliated suppliers that franchisees are required or recommended to use. This arrangement means that while there is a conflict of interest regarding purchases from Body20 itself, there isn't one concerning other external suppliers.
This arrangement has several implications for prospective Body20 franchisees. First, it limits their choice of suppliers for essential items, potentially affecting costs and product quality. Second, it means that a portion of the franchisee's revenue will directly benefit an officer of Sequel Brands through Body20's profits. While this is not uncommon in franchising, it is important for franchisees to understand the financial relationships involved.
The FDD also outlines a process for franchisees to request approval for alternative suppliers. This process involves a written request, potential facility inspections, product testing, and a fee of $1,000 or the actual costs incurred by Body20 for the evaluation. Body20 retains the right to approve or deny any supplier based on its sole judgment. This process adds a layer of complexity and cost for franchisees seeking to deviate from the approved supplier list.
Overall, while the ownership interest does create a restriction by mandating purchases from Body20 and its affiliates, the FDD emphasizes that there are no such interests in unaffiliated required suppliers. Franchisees should carefully consider the implications of these restrictions and the process for seeking alternative suppliers before investing in a Body20 franchise.