Under the Body20 agreement, what constitutes an Event of Default if the franchisee or their Affiliated Entities fail to meet the deadlines specified in the Development Schedule for executing the required number of Franchise Agreements?

According to Body20's 2025 Franchise Disclosure Document, failing to meet the deadlines for executing Franchise Agreements as outlined in the Development Schedule constitutes an Event of Default. Specifically, if a Body20 franchisee (or their Affiliated Entities) does not execute the required number of Franchise Agreements by any Signing Deadline specified in the Development Schedule, it is considered an Event of Default under the Development Agreement.

This means that Body20 has the right to declare the Development Agreement terminated. Upon termination, Body20 retains the Development Fee, and the franchisee remains responsible for any outstanding obligations. However, the franchisee's failure to meet the Development Schedule will not, in itself, be grounds for Body20 to terminate any previously executed Franchise Agreements.

In the event of default, Body20 has the option to modify the Development Area or the Development Schedule, reducing the number of Studios required to be developed. This modification becomes effective immediately upon written notice to the franchisee. If Body20 reduces the Development Area or Schedule due to an Event of Default, the franchisee will not receive a refund of any portion of the Development Fee.

It is important for prospective Body20 franchisees to understand the Development Schedule and the associated deadlines for executing Franchise Agreements. Failure to meet these deadlines can result in significant penalties, including termination of the Development Agreement and loss of the Development Fee.