In addition to liquidated damages, what other payments are Degree Wellness franchisees responsible for?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
16.1 Payment of Amounts Owed to Degree Wellness. You agree to pay us within five (5) days after the effective date of termination or expiration of the Franchise, or any later date that the amounts due to us are determined, all amounts owed to us or our affiliates which are then unpaid including, without limitation, any unpaid Initial Franchise Fee, any unpaid Continuing Franchise Fees, and any termination fee, damages, costs or expenses owed by you pursuant to Section 15.3, together with any audit costs and expenses owed by you pursuant to Section 13.2.
a. Equitable Remedies. Provided we give you the appropriate notice, we will be entitled, without being required to post a bond, to the entry of temporary and permanent injunctions and orders of specific performance to (1) enforce the provisions of this Agreement relating to your use of the Marks and non-disclosure, non-solicitation, non-disparagement, and non-competition obligations under this Agreement and any Restrictive Covenants Agreement signed by a General Manager; (2) prohibit any act or omission by you or your employees that constitutes a violation of any applicable law, ordinance, or regulation; constitutes a danger to the public; or may impair the goodwill associated with the Marks or Degree Wellness franchises; or (3) prevent any other irreparable harm to our interests. If we obtain an injunction or order of specific performance, then you shall pay us an amount equal to the total of our costs of obtaining it, including without limitation reasonable attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses, and any damages we incur as a result of the breach of any such provision. You further agree to waive any claims for damage in the event there is a later determination that an injunction or specific performance order was issued improperly.
(If you violate this provision, in addition to any other right or remedy we may have, you agree to pay the employee's current or former employer twice the employee's annual salary, plus all costs and attorneys' fees incurred as a result of the violation. This amount is set at twice the employee's annual salary because it is a reasonable estimation of the damages that would occur from such a breach, and it will almost certainly be impossible to calculate precisely the actual damages from such a breach.)
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees may be responsible for several payments beyond liquidated damages. Upon termination or expiration of the franchise agreement, Degree Wellness franchisees must pay all outstanding amounts owed to Degree Wellness or its affiliates, including any unpaid Initial Franchise Fee, Continuing Franchise Fees, termination fees, damages, costs, or expenses, as well as any audit costs and expenses.
Degree Wellness franchisees are also responsible for costs associated with legal actions. If Degree Wellness obtains an injunction or order of specific performance against a franchisee, the franchisee must cover all costs incurred by Degree Wellness in obtaining it. These costs include reasonable attorneys' and expert witness fees, investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses. Franchisees also waive any claims for damage if an injunction or specific performance order is later determined to have been issued improperly.
Furthermore, if a Degree Wellness franchisee violates a provision regarding employees by recruiting or hiring an employee of another Degree Wellness studio, the franchisee must pay the employee's current or former employer twice the employee's annual salary, plus all costs and attorneys' fees incurred as a result of the violation. This amount is considered a reasonable estimation of the damages resulting from such a breach.