Under the Body20 franchise agreement, what section addresses Noncompete Covenants?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 12 (Noncompete Covenants) of the Initial Franchise Agreement is hereby incorporated by reference and shall apply under this Agreement to you and your Owners, except the post-term noncompete covenant in Section 12.2 (After Termination, Expiration, or Transfer) of the Initial Franchise Agreement shall apply to any Competitive Business that is located within (i) the Development Area, (ii) a 10-mile radius of the Development Area, or (iii) a 10-mile radius of the location of any other Studio that is operating or under development at the time of such expiration, termination, or transfer. The Owners must personally bind themselves to this Section 8 by signing our current form of Payment and Performance Guarantee, which is attached as Appendix B to this Agreement.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, Section 12 of the Initial Franchise Agreement addresses noncompete covenants. Specifically, Item 23 references Section 12, titled "Noncompete Covenants," within the Initial Franchise Agreement.
This section is incorporated by reference and applies to the franchisee and their owners. However, the post-term noncompete covenant in Section 12.2, which deals with actions after termination, expiration, or transfer, has specific geographic limitations. This post-term covenant applies to any Competitive Business located within the Development Area, a 10-mile radius of the Development Area, or a 10-mile radius of any other Body20 studio operating or under development at the time of expiration, termination, or transfer.
The owners of the Body20 franchise must also personally agree to these terms by signing the Payment and Performance Guarantee, which is included as Appendix B to the agreement. This ensures that the noncompete obligations are binding not only on the franchisee entity but also on the individuals who own the entity.