What is the timeframe Body20 allows for dismissing a suit to foreclose any lien or mortgage?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
- (q) You or any Parent becomes insolvent or makes an assignment for the benefit of your creditors, execution is levied against your business assets, or a suit to foreclose any lien or mortgage is instituted against you and not dismissed within 30 days; you or any Parent makes an assignment for the benefit of creditors or admits in writing your or their insolvency or inability to pay your or their debts generally as they become due; you or any Parent consents to the appointment of a receiver, trustee, or liquidator of all or a substantial part of your or their property; the Studio is attached, seized, or levied upon, unless such attachment, seizure, or levy is vacated within 30 days; a lender forecloses on a material portion of your or your Parent's assets; or any order appointing a receiver, trustee, or liquidator of you, your Parent, or the Studio is not vacated within 30 days following the entry of such order;
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, if a suit to foreclose any lien or mortgage is instituted against the franchisee or their parent, they have 30 days to dismiss it. Failure to do so constitutes grounds for termination of the franchise agreement. This timeframe also applies to attachments, seizures, or levies against the studio; these must be vacated within 30 days to avoid a breach of contract. Similarly, if an order appointing a receiver, trustee, or liquidator is not vacated within 30 days, it can lead to termination.
This provision protects Body20 by ensuring that franchisees maintain financial stability and operational control of their studios. The 30-day window provides an opportunity for franchisees to resolve legal or financial issues, but it also sets a clear expectation for prompt action. Franchisees should be aware of this requirement and have contingency plans in place to address any potential legal or financial challenges that could lead to foreclosure or similar actions.
Many franchise agreements include similar clauses that allow the franchisor to terminate the agreement if the franchisee faces significant financial distress or legal action. This is because such events can negatively impact the brand's reputation and the overall stability of the franchise system. The specific timeframes for addressing these issues can vary, but it is common for franchisors to require prompt resolution to protect their interests.