After termination of the Body20 franchise agreement, for how long are franchisees restricted from engaging in a competitive business?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 Body20's 2025 Franchise Disclosure Document, franchisees and their owners face certain restrictions after the termination, expiration, or transfer of the franchise agreement. Specifically, for two years following the end of the agreement or an approved transfer to a new franchisee, the franchisee and their owners are subject to non-compete restrictions. These restrictions mirror those in place during the term of the agreement.
However, the restrictions on owning, managing, engaging in, or being employed by a competitive business, as well as diverting business or customers, are geographically limited. These limitations apply to any competitive business located within a 10-mile radius of the former Body20 studio or any other Body20 studio that is operating or under development at the time of the agreement's expiration, termination, or transfer.
For owners, the two-year period begins either from the expiration, termination, or transfer of the franchise agreement or from the termination of the owner's relationship with the franchisee, whichever comes first. This means that if an owner leaves the Body20 franchise before the agreement ends, their non-compete period starts from their departure date, not necessarily the agreement's end date. This clause aims to protect Body20's market and confidential information by preventing former franchisees and owners from immediately opening a competing business nearby.