Under what conditions can Body20 terminate the Development Agreement?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
6. Termination.
- 6.1 Events of Default. Any one or more of the following constitutes an "Event of Default" under this Agreement:
- (a) You (or your Affiliated Entities) fail to execute the applicable number of required Franchise Agreements by any Signing Deadline specified in the Development Schedule;
- (b) You (or your Affiliated Entities) fail to have open and operating the applicable number of required Studios specified in the Development Schedule by any Opening Deadline specified in the Development Schedule;
- (c) You, your Owners, or your Affiliates breach or commit a default under any Franchise Agreement or other agreement executed with us or our Affiliates (a "Related Agreement") and we or our Affiliates (i) terminate such Related Agreement or (ii) have the right to terminate such Related Agreement, even if we do not exercise such termination right; or
- (d) You, your Owners, or your Affiliates breach or otherwise fail to comply fully with any other provision contained in this Agreement, including Section 8 (Noncompete Covenants).
6.2 Our Remedies.
- (a) Termination. If any Event of Default occurs under Section 6.1, we may, at our sole election, declare this Agreement and any and all other rights granted to you, and restrictions imposed on us, under this Agreement to be immediately terminated and of no further force or effect. Upon termination of this Agreement for any other reason whatsoever, we will retain the Development Fee and you will not be relieved of any of your obligations, debts, or liabilities hereunder, including, without limitation, any debts, obligations, or liabilities which have accrued prior to such termination. Your failure to open and thereafter operate Studios in accordance with the Development Schedule will not, in itself, constitute cause for us to terminate any previously-executed Franchise Agreement.
- (b) Other Remedies. If any Event of Default occurs under Section 6.1, in lieu of termination, we may at our option, and in our discretion, unilaterally modify the Development Area and/or modify the Development Schedule to decrease the number of
Studios required to be developed under this Agreement by written notice to you, and such modification shall be effective immediately upon receipt of such written notice from us to you. If we reduce your Development Area or your Development Schedule due to an Event of Default, we will not be obligated to refund any portion of the Development Fee to you.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 can terminate the Development Agreement if an Event of Default occurs. Events of Default include failing to execute the required number of Franchise Agreements by the Signing Deadline, failing to have the required number of Studios open and operating by the Opening Deadline, or breaching any Franchise Agreement or other agreement with Body20 or its affiliates. Additionally, Body20 can terminate the agreement if the franchisee, their owners, or their affiliates breach any provision of the Development Agreement, including non-compete covenants.
If any of these Events of Default occur, Body20 has the option to terminate the Development Agreement and all rights granted to the franchisee. Upon termination, Body20 will retain the Development Fee, and the franchisee remains responsible for all outstanding obligations and liabilities. However, the franchisee's failure to meet the Development Schedule does not automatically lead to the termination of any previously executed Franchise Agreements.
In lieu of terminating the agreement, Body20 can also modify the Development Area or the Development Schedule to decrease the number of Studios required to be developed. This modification becomes effective immediately upon written notice to the franchisee. If Body20 reduces the Development Area or Schedule due to an Event of Default, the franchisee will not receive a refund of any portion of the Development Fee.
For franchisees in New York, a rider to the Development Agreement specifies that the franchisee may terminate the agreement on any grounds available by law under the provisions of Article 33 of the General Business Law of the State of New York.