Under what conditions might Body20 consent to a transfer?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
which these transactions take place. References to a "Controlling Interest" in you mean either (a) 20% or more of the direct or indirect legal or beneficial ownership interests in your Entity or (b) the acquisition of an ownership interest or other right or interest which grants the power (whether directly or indirectly) to direct or cause the direction of management and polices
of you or the Studio to any individual or Entity, or group of individuals or Entities, that did not have that power before that acquisition.
13.3 Transfer Procedure.
(a) Consent Required. This Agreement and the License are personal to you, and we have granted the License in reliance on your and your Owners' business skill, financial capacity, and personal character. Accordingly, neither you nor any of the Owners or any successors to any part of your interest in this Agreement or the License may make any Transfer or permit any Transfer to occur without obtaining our prior written consent, except as provided in Section 13.7 (Permitted Transfers). Any purported Transfer, without our prior written consent, will be null and void and will constitute an Event of Default (as herein defined), for which we may terminate this Agreement without opportunity to cure.
(b) Obtaining Consent. If you or any of your Owners desire to make a Transfer, you must promptly provide us with advance written notice and must submit a copy of all proposed contracts and other information concerning the Transfer and transferee that we reasonably require. We have the right to communicate with both you, your counsel, and the proposed transferee on any aspect of a proposed Transfer. No Transfer that requires our consent may be completed until at least 60 days after we receive written notice of the proposed Transfer. We have sole and absolute discretion to withhold our consent, except as otherwise provided in Sections 13.6 (Transfer to an Entity), 13.7 (Permitted Transfers), and 13.8 (Transfer Upon Death, Incapacity, or Bankruptcy), and we may condition our consent on compliance with any conditions that we specify. If your Studio is not open and operating, we will not consent to your Transfer of this Agreement, and we are under no obligation to do so. Our consent to a Transfer does not constitute a waiver of any claims that we have against the transferor, nor is it a waiver of our right to demand exact compliance with the terms of this Agreement.
13.4 Control Transfer. For a proposed Control Transfer, in addition to any other conditions that we reasonably specify, the following conditions apply (unless waived by us):
- (a) You or your transferee must pay us the Transfer Fee;
(b) All of your accrued monetary obligations and all other outstanding obligations to us, our Affiliates, and approved suppliers shall be up to date, fully paid, and satisfied;
(c) You and your Affiliates must not be in default if any provision of this Agreement and any Related Agreements as of (i) the date of the request for our approval of the Transfer (or you must make arrangements satisfactorily to us to come into compliance by the date of the Transfer) and (ii) the date of the Transfer;
(d) You and your Owners must execute a general release, in a form that we prescribe, of any and all claims (to the extent permitted by Applicable Laws) against us, our Affiliates, and our and our Affiliates' past, present, and future officers, directors, mangers, members, equity holders, agents, and employees, including claims arising under Applicable Laws;
(e) You and your Owners must agree to remain liable for all of the obligations to us in connection with the Studio arising before the effective date of the Transfer and execute any and all instruments that we reasonably request to evidence such liability;
(f) You and your Owners must continue to be bound by the provisions of Sections 9 (Intellectual Property), 10 (Proprietary Information), 11 (Indemnification), and 12 (Noncompete Covenants) as if they were the Franchisee and this Agreement had expired or terminated as of the effective date of the Transfer;
(g) You must provide us with written notice from your landlord indicating that your landlord has agreed to transfer the Site Lease to your transferee;
(h) Your proposed transferee (or, if the transferee is not an individual, all owners of any legal or beneficial interest in the transferee) must demonstrate to our satisfaction that such transferee meets all of our then-current qualifications to become a franchisee, including not having any involvement with a Competitive Business.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20's consent is required for any transfer of the Franchise Agreement or the License, as these are personal to the franchisee and based on their business skill, financial capacity, and personal character. A transfer without prior written consent from Body20 will be considered an Event of Default, potentially leading to termination of the agreement without an opportunity to cure the default.
To obtain consent for a transfer, the franchisee must provide Body20 with advance written notice, including copies of all proposed contracts and information about the transferee that Body20 reasonably requires. Body20 has the right to communicate with the franchisee, their counsel, and the proposed transferee regarding the transfer. No transfer requiring consent can be completed until at least 60 days after Body20 receives written notice of the proposed transfer. Body20 has sole and absolute discretion to withhold consent, except as otherwise provided in Sections 13.6, 13.7, and 13.8, and may condition consent on compliance with specified conditions. Body20 will not consent to a transfer if the Body20 studio is not open and operating.
For a Control Transfer, the franchisee or transferee must pay Body20 a Transfer Fee, and all accrued monetary and outstanding obligations to Body20, its Affiliates, and approved suppliers must be up to date, fully paid, and satisfied. Both the franchisee/owners and the transferee/owners must execute a consent to Transfer agreement in a form prescribed by Body20, detailing the conditions for obtaining consent. For transfers that do not result in a Control Transfer, most of the conditions for Control Transfers apply, except for obtaining the landlord's consent, completing training, signing a new franchise agreement, and renovating the studio.
Body20 will consent to the assignment of the Agreement to an Entity formed for ownership convenience, provided that the Entity's sole business is operating the studio, the franchisee satisfies specific conditions (payment of Transfer Fee, all payments made, compliance with obligations, signing a general release, remaining liable for pre-Transfer obligations, remaining bound to certain provisions, and signing an assignment and guaranty), and the Owners hold equity interests in the new Entity in the same proportion as before. The other provisions regarding transfer do not apply to granting a security interest in the Site, the Studio, or any Operating Assets to a financial institution that provided financing for the studio, but a security interest cannot be granted in the Franchise Agreement.