What is the significance of Sequel Brands Holdings, LLC guaranteeing Body20's obligations?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
t recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date and before the financial statements are available to be issued.
The Company has evaluated subsequent events through May 2, 2025, which is the date the financial statements were available to be issued.
Note 3 – Member's Equity
The Company's LLC operating agreement has a perpetual life. Excess cash flow, tax liability distributions, and profits and losses are to be distributed to the Member in accordance with the operating agreement. The liability of the Company's Member is limited to its specific capital balance. Upon liquidation of the Company, the net assets shall be distributed to the Member in accordance with the operating agreement.
GUARANTEE OF PERFORMANCE
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.
The Guarantor signs this guarantee at 4000 MacArthur Blvd., Suite 800, Newport Beach, California 92660 on June ____________________________________
Guarantor:
By:
SEQUEL BRANDS HOLDINGS LLC
Name: Anthony Geisler
Title: Chief Executive Officer
EXHIBIT D TO THE FRANCHISE DISCLOSURE DOCUMENT
State Administrators and Agents for Service of Process
Listed here are the names, addresses and telephone numbers of the state agencies having responsibility for franchising disclosure/registration laws and for service of process. We may not yet be registered to sell franchises in any or all of these states.
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") guarantees Body20 Franchisor LLC's performance under its franchise agreements. This guarantee means that Sequel Holdings has agreed to assume the duties and obligations of Body20 under the franchise agreements. This is documented in Exhibit C to the FDD, which includes both the audited balance sheet of Sequel Brands Holdings, LLC as of April 30, 2025, and a copy of Sequel Holdings' guarantee of Body20's obligations. The guarantee remains in effect until all obligations of Body20 under its franchise registrations and the Franchise Agreement are satisfied.
For a prospective Body20 franchisee, this guarantee provides an added layer of security. Should Body20 be unable to fulfill its obligations, Sequel Holdings, as the guarantor, would step in to ensure those obligations are met. This is particularly relevant because Body20 was formed on April 1, 2025, and became a franchisor on April 4, 2025, making it a relatively new entity. The guarantee from Sequel Holdings, a more established entity, mitigates some of the risk associated with investing in a new franchise.
Sequel Brands Holdings, LLC, formed on April 8, 2025, is a wholly-owned subsidiary of Sequel Brands, LLC. Sequel Holdings' primary purpose is to facilitate the growth of Sequel Brands, LLC's wholly-owned subsidiaries that are franchisors in the fitness industry and to provide a guarantee of performance to these franchise entities. As of April 30, 2025, Sequel Holdings received an initial equity contribution of $1,000,000 in cash. Sequel Brands, LLC also owns iFlex Franchisor LLC, Beem Franchisor LLC, and Pilates Addiction Franchisor LLC.
The guarantee by Sequel Brands Holdings, LLC, ensures that franchisees have recourse to a larger, more financially stable entity if Body20 fails to meet its contractual obligations. This arrangement is intended to provide franchisees with confidence in the long-term viability and support of the Body20 franchise system.