Under the Body20 Development Agreement, who has the right to develop and open Studios?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
t Area in accordance with the Development Schedule (defined below), provided that you also must execute our then-current standard franchise agreement (each, a "Franchise Agreement") for each such Studio, which will govern the development and operation of such business.
- D. You desire to develop multiple Studios within the Development Area in accordance with the Development Schedule and to timely execute Franchise Agreements to govern the development and operation of such Studios.
NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereby agree as follows:
1. Grant of Development Rights and Development Area.
1.1 Grant of Development Rights. Subject to the terms and conditions of this Agreement, we grant to you the right, and you undertake the obligation, to develop and open in the area designated on Appendix A to this Agreement (the "Development Area") the number of Studios specified in Appendix A in accordance with the development schedule specified in Appendix A (the "Development Schedule"). This Agreement does not give you any right to franchise, license, subfranchise, or sublicense others to develop, open, or operate Studios. Only you (and/or your Affiliated Entities) have the right to develop and open Studios pursuant to this Agreement. This Agreement does not grant you any right to use the Marks or the System (as such terms are defined in the Initial Franchise Agreement). Rights to use the Marks and the System are granted only by the Franchise Agreements.
1.2 Delegation to Affiliate-Owned Businesses. At your request, the Franchise Agreement for any Studio in the Development Area may be signed by an Entity formed by you to develop and operate the Studio (an "Affiliated Entity") (and which Studio shall count as one of your Studios for the purpose of satisfying the Development Schedule), provided all of the following conditions are met: (a) you own at least 51% of the direct ownership interests in such Affiliated Entity; (b) the Affiliated Entity conducts no business other than the operation of one or more of the Studios;
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the Development Agreement grants specific rights and obligations regarding studio development. Body20 grants the developer the right and imposes the obligation to develop and open a specified number of studios within a defined Development Area, according to an agreed-upon Development Schedule. This right is exclusive to the developer and their Affiliated Entities.
The agreement explicitly states that the developer cannot franchise, license, subfranchise, or sublicense these development rights to others. Only the developer or their Affiliated Entities are authorized to develop and open studios under the Development Agreement. However, the Development Agreement does not grant any rights to use Body20's Marks or System; these rights are granted only through separate Franchise Agreements.
An exception exists allowing an Affiliated Entity to sign the Franchise Agreement for a studio within the Development Area, provided that the developer retains at least 51% direct ownership in the Affiliated Entity, the Affiliated Entity's sole business is operating Body20 studios, and that the Affiliated Entity and its owners meet Body20's criteria for franchisees. Additionally, the developer and their Owners must provide a personal guarantee, assuming full liability for all obligations under the Franchise Agreement.