Can Body20 use Brand Fund monies for branding studies?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
We may use monies in the Brand Fund and any earnings on the Brand Fund account for any costs associated with advertising (media and production), branding, marketing, public relations and/or promotional programs and materials, and any other activities we determine, in our sole discretion, would benefit the Brand or the Studios generally. These activities may include, but are not limited to: (i) advertising campaigns in various media; (ii) creation, maintenance, and optimization of the System Website or other websites; (iii) keyword or adword purchasing programs; (iv) conducting and managing social media activities; (v) direct mail advertising; (vi)
market research, including secret shoppers and customer satisfaction surveys; (vii) branding studies; (viii) engaging advertising and/or public relations agencies and paying any related retainers and fees; (ix) paying the salaries and benefits of our marketing and brand-building personnel and any other overhead related to our marketing department; (x) purchasing promotional items; (xi) conducting and administering promotions, contests, giveaways, public relations events, and community involvement activities; (xii) marketing the sale of Franchises; (xiii) providing promotional and other marketing materials and services to our franchisees; and (xiv) reasonable administrative costs and overhead we incur related to the administration of the Brand Fund and the implementation of Brand Fund-supported programs.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 38–49)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the Brand Fund, to which franchisees contribute up to 4% (currently 2%) of Gross Sales, can be used for various activities that Body20 determines would benefit the brand or the studios generally. These activities explicitly include branding studies. This means that a portion of the fees Body20 franchisees pay into the Brand Fund could be allocated to conducting studies and research aimed at strengthening the Body20 brand.
Body20 retains sole discretion over how the Brand Fund is used, including the final decision on creative concepts, materials, and media. While Body20 may consult with a franchisee advisory council or committee, the ultimate authority rests with Body20. This implies that franchisees may not have direct control over the allocation of Brand Fund monies, including those used for branding studies.
In 2024, the Brand Fund expenditures were allocated with 61.46% going to production, 18.5% to administrative expenses, and 20.04% to media placement. While this provides a historical snapshot, it doesn't guarantee future allocations will follow the same pattern. Franchisees should be aware that the actual percentage spent on branding studies can vary, and Body20 is not obligated to spend a specific amount on this activity. Body20 will prepare an unaudited statement of contributions and expenditures for the Brand Fund and make it available within 60 days after the close of their fiscal year to franchisees who make a written request for a copy.