Under what circumstances does a Body20 franchisee pay a Successor Fee?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
- (i) You pay to us the Successor Fee (as defined in Section 3.6 (Successor Fee)).
The Initial Term and Successor Terms are referred collectively in this Agreement as the "Term." You may only exercise this right to obtain a Successor Term if:
(a) You give us written notice of your desire to obtain a successor License at least six, but no more than 12, months before the expiration of the then-current Initial Term or Successor Term;
(b) You and your Owners (as applicable) executing and returning to us the successor Franchise Agreement, Owner's Guarantee, and ancillary agreements we provide to you to govern your ownership and operation of the Studio during the Successor Term (the "Successor Agreements"), which you acknowledge may contain terms materially different than those contained in this Agreement, including (i) higher rates of Royalty Fees and Brand Fund Fees (as both are herein defined) and other fees and charges and (ii) a modified Territory.
The Successor Agreements will be modified as we deem necessary and appropriate to reflect changes we deem appropriate for such Successor Term, including (a) that the Studio is a developed and operating business, (b) that you are paying a Successor Fee (as defined in Section 3.6 (Successor Fee)) in lieu of an initial franchise fee, (c) any changes to the description of the Territory (which may make it smaller or larger), as we deem appropriate to reflect changes in demographics, competitive positioning, and our territorial policies since the Studio was originally developed, and (d) that you will have no further renewal or extension rights;
(c) You refurbish or renovate the Studio, at your expense, to conform the decor, color schemes, storefront, signage, and presentation of the Marks to our then-current image and, if necessary, in our sole opinion, to update and replace the equipment, furniture, signage, and fixtures to meet our then-current specifications;
(d) You and your Owners execute a general release, in a form we prescribe, of any and all claims against us, our Affiliates, and our and their past, present, and future officers, directors, shareholders, and employees arising out of, or relating to, your Studio;
(e) You complete, and have your Operating Principal and Designated Manager complete, all of our then-current training requirements, including any additional training that we may require;
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, a franchisee is required to pay a Successor Fee when they exercise their right to obtain a successor license for an additional term. This fee is specifically mentioned in the context of entering into a Successor Term agreement.
To be eligible for a Successor Term, the franchisee must provide written notice of their desire to renew the license at least six, but no more than 12, months before the current term expires. They must also execute and return the successor Franchise Agreement, Owner's Guarantee, and any other related agreements. These successor agreements may contain terms that are significantly different from the original agreement, potentially including higher royalty fees, brand fund fees, and modifications to the territory.
In addition to the above, the franchisee must refurbish or renovate the Body20 studio to meet the franchisor's current image standards, including decor, color schemes, and signage. They must also update or replace equipment, furniture, and fixtures as needed. Furthermore, the franchisee and their owners must execute a general release of any claims against Body20 and its affiliates. Finally, the franchisee and their operating principal and designated manager must complete all current training requirements, including any additional training that Body20 may require. Meeting all of these conditions, including paying the Successor Fee, allows the franchisee to continue operating under a new term.