Under what circumstances does Body20 have the option to purchase the assets of my studio?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
g the final, unappealed determination of the dispute under this Agreement. If an arbitrator or court of competent jurisdiction makes a final, unappealed determination that the termination of this Agreement or our failure to offer a Successor Term was not valid, we will make a full and complete accounting for the period during which we operated the Studio. We have the unrestricted right to assign or delegate this right to operate the Studio to an Affiliate or third party to operate the Studio in accordance with this Section.
15.7 Our Right to Purchase Studio Assets.
(a) Exercise of Option. Upon termination of this Agreement for any reason (other than your termination in accordance with Section 14.3 (Termination By You)) or expiration of this Agreement without our and your signing a successor franchise agreement, we have the option to purchase the inventory, supplies, Operating Assets, and other assets used in the operation of the Studio that we designate (the "Purchased Assets"). As a first step in exercising our option, we must give you written notice within 15 days after the date of termination or expiration of our intent to conduct due diligence (the "Exercise Notice"). We have the unrestricted right to exclude any assets we specify relating to the Studio from the Purchased Assets and not acquire them. You agree to provide us the financial statements and other
information we reasonably require, and to allow us to inspect the Studio and its assets, to determine whether to exercise our option. If a Franchisee Party owns the Site, we may elect to include a fee simple interest in the Site as part of the Purchased Assets or, at our option, lease the Site from the Franchisee Party (or an Entity controlled by your Owner) for an initial ten-year term with one renewal term of five years (at our option) on commercially reasonable terms, which shall include the right to sublease the Site to another party. You and your Owners agree to cause your Affiliate or any Entity controlled by such Owner to comply with these requirements. If a Franchisee Party leases the Site from an unaffiliated lessor, you agree (at our option) to cause the Franchisee Party to assign the Site Lease to us or to enter into a sublease for the remainder of the Site Lease term on the same terms (including renewal options) as the Lease.
- (b) Operations Pending Purchase. If we do not exercise our right to operate the Studio, we may require you to continue to operate the Studio in accordance with this Agreement during the period between the expiration or termination of this Agreement through (i) the date on which we decide to decline our right to exercise this option (or the expiration of the option, if we fail to provide an Exercise Notice by the deadline) or (ii) the closing of our purchase.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 has the option to purchase the assets of your studio under specific conditions related to the termination or expiration of the franchise agreement. Specifically, Body20 can exercise this option if the franchise agreement is terminated for any reason, except if you terminate it according to Section 14.3, or if the agreement expires without a successor agreement being signed by both parties.
To initiate this process, Body20 must provide you with written notice within 15 days of the termination or expiration date, indicating their intent to conduct due diligence. Body20 has the discretion to exclude any assets related to the studio from the purchase. You are obligated to provide Body20 with financial statements and allow them to inspect the studio and its assets to assess whether to proceed with the purchase.
The purchase price for the assets will be based on their fair market value, considering their use in a non-franchised competitive business, not as an operating Body20 studio. This valuation excludes any value associated with the franchise rights, goodwill tied to Body20's trademarks, brand image, proprietary information, or other intellectual property. For equipment valuation, including exercise equipment and the technology system, the useful life is capped at three years. Body20 can assign their right to purchase the studio assets to another individual or entity.