Can Body20 terminate the Development Agreement if the franchisee does not satisfy their development obligations?

According to Body20's 2025 Franchise Disclosure Document, Body20 has the right to terminate the Development Agreement if the franchisee fails to meet their development obligations. This is a significant point for potential franchisees considering a Development Agreement, as it underscores the importance of adhering to the development schedule outlined in the agreement. The development schedule, which includes the number of studios to be developed and the deadlines for their development, is determined by Body20 and the franchisee before signing the Development Agreement.

If a Body20 franchisee does not satisfy the development obligations, Body20 has the right to terminate the Development Agreement. However, Body20 also has the option to modify the Development Area or the Development Schedule instead of terminating the agreement. This modification, enacted through written notice, could decrease the number of studios the franchisee is required to develop.

It is important to note that if Body20 reduces the Development Area or Development Schedule due to a franchisee's default, the franchisee will not be entitled to a refund of any portion of the Development Fee. This policy highlights the financial risk associated with failing to meet development obligations and the potential loss of investment. Prospective franchisees should carefully consider their ability to meet the development schedule and understand the financial implications of not doing so.