During the term of the Body20 agreement, can a franchisee or their owners own or manage a competitive business without Body20's consent?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 12 Noncompete Covenants.
- 12.1 During Term. You acknowledge that you will receive valuable, specialized training and confidential information regarding the manufacturing, operational, sales, promotional, and marketing methods of us and the Brand. During the Term, you and your Owners must not, without our prior written consent, either directly or indirectly, for themselves, or through, on behalf of, or in conjunction with any other person or Entity:
- (a) own, manage, engage in, be employed by, advise, make loans to, lease or sublease space to, or have any other interest in any competitive business, as such term is defined in Schedule A (a "Competitive Business") at any location in the United States;
- (b) divert or attempt to divert any business or customer or potential business or customer of the Studio to any Competitive Business, by direct or indirect inducement or otherwise;
- (c) perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; or
- (d) use any vendor relationship established through your association with us for any purpose other than to purchase products or equipment for use or retail sale in the Studio.
- 12.2 After Termination, Expiration, or Transfer. For two years after the expiration or termination of this Agreement or an approved Transfer to a new franchisee, you and your Owners will be subject to the same restrictions as in Section 12.1 (During Term), except the restrictions in Section 12.1(a) and 12.1(b) shall be geographically limited to any Competitive Business that is located within a 10-mile radius of your former Studio or any other Studio that is operating or under development at the time of such expiration, termination, or Transfer. With respect to the Owners, the time period in this Section 12.2 will run from the expiration, termination, or Transfer of this Agreement or from the termination of the Owner's relationship with you, whichever occurs first.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Agreement, franchisees and their owners are restricted from engaging in any competitive business during the term of the agreement without prior written consent from Body20. This restriction extends to owning, managing, being employed by, advising, making loans to, leasing or subleasing space to, or having any other interest in a competitive business. This non-compete clause applies to any location within the United States.
This means that as a Body20 franchisee, you and your owners cannot be involved in any business that Body20 defines as competitive, which is detailed in Schedule A of the Franchise Agreement. This includes activities such as diverting customers from the Body20 studio to a competitive business, performing actions that harm the goodwill associated with the Body20 brand, or using vendor relationships established through Body20 for purposes outside of the studio.
After the agreement expires, terminates, or is transferred, the non-compete restrictions continue for two years. During this post-term period, the geographic scope is limited to a 10-mile radius around the former Body20 studio or any other Body20 studio operating or under development at the time of expiration, termination, or transfer. For owners, this two-year period begins either at the end of the agreement or when the owner's relationship with the franchisee ends, whichever comes first.
These non-compete covenants are designed to protect Body20's market position, proprietary information, and franchise network. Prospective franchisees should carefully review Schedule A of the Franchise Agreement to fully understand what constitutes a "Competitive Business" and consider the implications of these restrictions on their business activities both during and after the franchise term.