Under what circumstances does Body20 NOT need to approve a transfer of the franchise?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| l. | Our approval of transfer by franchisee | Section 13.3 | We have the right to approve all transfers, except for your grant of a security interest in the Site (if owned by you), the Studio, or any Operating Asset to a party providing financing for your acquisition, development, and/or operation of the Studio. |
| m. | Conditions for our approval of transfer | Sections 13.4 and 13.5 | For a Control Transfer, you pay us pay us the Transfer Fee; all of your monetary obligations to us, our affiliates, and approved suppliers are satisfied; you and your affiliates are not in default of the Franchise Agreement or any Related Agreement; you and your Owners sign a general release; you and your Owners remain liable for obligations incurred or arising prior to transfer; you comply with noncompetition and confidentiality provisions; your landlord consents to the transfer of your lease; proposed transferee agrees to discharge all of your obligations; proposed transferee qualifies, meets training requirements, and signs then-current franchise agreement; proposed transferee upgrades the Studio to our then-current specifications; new franchisee covenants to continue to operate the Studio under the Marks; proposed transferee's owners execute our then-current form of personal guarantee; we determine purchase price acceptable and financing arrangements are subordinate to our interests; and you and your Owners and the proposed transferee and its owners sign our current form of consent to transfer agreement, which states the conditions with which you must comply to secure our consent to the proposed transfer. For any Transfer that does not result in a Control Transfer, in addition to any other conditions that we reasonably specify, you and/or your transferee must satisfy the conditions above, except for the requirements to obtain your landlord's consent, complete training, sign a new franchise agreement, and renovate the Studio. |
| n. | Our right of first refusal to acquire franchisee's business | Section 13.9 | We can match any offer for your Studio, the Studio's assets, or any ownership interest, except for Transfers to an Entity under Section 13.7 of the Franchise Agreement (Permitted Transfers) or 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 56–64)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 does not need to approve a transfer of the franchise in the specific instance where a franchisee grants a security interest in the Site (if owned by you), the Studio, or any Operating Asset to a party providing financing for your acquisition, development, and/or operation of the Studio. This means a franchisee can use their Body20 franchise assets as collateral for financing without requiring franchisor approval.
However, Body20 retains the right to approve all other transfers. If a franchisee seeks to make a Control Transfer, they must pay a transfer fee, satisfy all monetary obligations to Body20, its affiliates, and approved suppliers, not be in default of the Franchise Agreement, and ensure both the franchisee and their owners sign a general release. The landlord must consent to the lease transfer, the proposed transferee must agree to discharge all obligations, meet training requirements, and sign the current franchise agreement. The studio must be upgraded to current specifications, and the new franchisee must covenant to continue operating under the Body20 Marks. The proposed transferee's owners must execute a personal guarantee, and Body20 must deem the purchase price acceptable with financing subordinate to their interests. Finally, both parties must sign a consent to transfer agreement outlining compliance conditions.
For transfers not resulting in a Control Transfer, many of the same conditions apply, except for obtaining landlord consent, completing training, signing a new franchise agreement, and renovating the studio. Body20 also retains a right of first refusal to match any offer for the Studio, its assets, or any ownership interest, except for transfers to an Entity under Section 13.7 (Permitted Transfers) or 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy). This extensive list of conditions highlights the importance Body20 places on maintaining control over who operates its franchises and ensuring brand standards are upheld during ownership changes.