During the term of the Body20 franchise agreement, are franchisees and their owners allowed to advise a competitive business?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| q. | Non-competition covenants during the term | Section 12.1 | You and your Owners may not: (A) own, manage, engage in, be employed by, advise, make loans to, or have any other interest in (i) any gymnasium, studio, athletic or fitness center, health club, exercise, aerobics facility, or similar fitness or exercise facility or business, (ii) any business that offers fitness training or products, services, or Sessions that are similar to those offered by a Studio, or (iii) any Entity that grants franchises or licenses for any of the businesses in (i) or (ii) (a "Competitive Business") 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. |
| r. | Non-competition covenants after the Franchise Agreement is terminated or expires | Section 12.2 | For two years after the expiration of termination of your Franchise Agreement, you and your Owners will be subject to the same restrictions stated in Item 17(q) above, except the restrictions stated in (A) and (B) of Item 17(q) will 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 that time. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 56–64)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, franchisees and their owners face significant restrictions on their involvement with competitive businesses during the term of the franchise agreement. Specifically, they are prohibited from owning, managing, engaging in, being employed by, advising, making loans to, or having any other interest in a Competitive Business within the United States. A Competitive Business is defined broadly as any gymnasium, studio, athletic or fitness center, health club, exercise, aerobics facility, or similar fitness or exercise facility or business; any business that offers fitness training or products, services, or Sessions that are similar to those offered by a Body20 Studio; or any entity that grants franchises or licenses for any of these types of businesses.
This non-competition covenant is a standard practice in franchising to protect the franchisor's brand, customer base, and proprietary information. By preventing franchisees and their owners from advising or being involved with competing businesses, Body20 aims to maintain a competitive edge and prevent the dissemination of its business model and practices to competitors. This restriction applies throughout the duration of the franchise agreement.
After the franchise agreement expires or is terminated, the restrictions are modified to be geographically limited. For a period of two years, franchisees and their owners are subject to the same restrictions, but only within a 10-mile radius of their former Body20 studio or any other Body20 studio that is operating or under development at that time. This post-term restriction allows former franchisees to pursue other business ventures outside of the immediate vicinity of a Body20 location, while still protecting Body20's market share and goodwill in its existing territories.
Prospective Body20 franchisees should carefully consider these non-competition covenants and how they might impact their future business opportunities. It is essential to understand the full scope of these restrictions and to seek legal counsel to ensure compliance and to evaluate the potential impact on personal and professional activities both during and after the franchise term.