Under what conditions might Body20 require a franchisee to continue operating the studio after the agreement expires or terminates?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
rcially 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. However, we may, at any time during that period, assume the management of the Studio ourselves or appoint a third party (who may be our Affiliate) to manage the Studio pursuant to the terms of Section 15.6 (Our Right to Operate).
- (c) Purchase Price.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, a franchisee may be required to continue operating the studio even after the franchise agreement has expired or been terminated. This occurs if Body20 has not yet decided whether to exercise its option to purchase the studio's assets. Specifically, the franchisee may have to continue operations from the date of expiration or termination until either Body20 declines to exercise its purchase option, the option expires without Body20 providing an Exercise Notice, or the purchase of the studio is completed.
During this period, Body20 retains the right to either manage the studio itself or appoint a third party, potentially an affiliate, to manage it, according to the terms outlined in Section 15.6 (Our Right to Operate). If Body20 chooses to exercise its right to possess and operate the studio, the franchisee must promptly vacate the premises and provide assistance to facilitate the transition. In this scenario, the franchisee will not be entitled to any revenue generated during the period Body20 or its designee operates the studio.
Even if the franchisee disputes the validity of the termination or Body20's decision not to grant a successor term, Body20 still has the option to operate the studio pending the final resolution of the dispute. Should a final determination be made that the termination or failure to offer a successor term was invalid, Body20 will provide a full accounting for the period it operated the studio. This ensures that Body20 can maintain continuous operation of the studio, manage the transition effectively, and protect its interests during any period of uncertainty following the agreement's expiration or termination.