Does the Degree Wellness agreement create a landlord and tenant relationship?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.1 Management Company hereby grants Licensed Provider a revocable, nonassignable license to use the Premises, and all fixtures, equipment, and furnishings located therein, during the Agreement Term. The license to use the Premises granted by this Section 4.1 is not a lease or sublease of the Premises and this Agreement shall not be interpreted to create a landlord and tenant relationship between Management Company (or the owner of the Premises) and Licensed Provider or to give Licensed Provider any right to continued use, possession or occupancy of the Premises, except to the extent expressly stated in this Agreement. This license shall be deemed to end automatically upon the termination of this Agreement. Licensed Provider shall use all fixtures, equipment and furnishings granted by this Section 4.1 in the manner in which they are intended and in compliance with all rules and requirements of Management Company and, if applicable, its landlord; provided, however, that in all cases Licensed Provider shall have the discretion and authority to use such fixtures, equipment and furnishings to provide Studio Services only as deemed necessary or advisable by Licensed Provider in his/her discretion. Licensed Provider shall return to Management Company the Premises, fixtures, equipment, and furnishings in the same condition, reasonable wear and tear excepted, as they were in as of the date of this Agreement.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to the 2025 Degree Wellness Franchise Disclosure Document, the agreement between the Management Company and the Licensed Provider does not establish a landlord-tenant relationship. The Management Company grants the Licensed Provider a revocable, nonassignable license to use the premises, fixtures, equipment, and furnishings during the agreement term. This license is explicitly stated not to be a lease or sublease, and the agreement should not be interpreted to create a landlord and tenant relationship.
This means that the Licensed Provider's rights to use the premises are limited and subject to the terms of the agreement, and do not extend to the rights typically associated with a tenant. The Licensed Provider's use of the premises is contingent upon the agreement's terms and can be revoked. Upon termination of the agreement, the license automatically ends, and the Licensed Provider must return the premises, fixtures, equipment, and furnishings in the same condition as at the start of the agreement, with reasonable wear and tear excepted.
This arrangement differs from a traditional lease where a tenant has more extensive rights to the property. The Degree Wellness agreement emphasizes that the Licensed Provider's rights are limited to the express terms of the agreement and do not grant any right to continued use, possession, or occupancy beyond what is explicitly stated. This distinction is important for prospective franchisees to understand, as it affects their rights and responsibilities regarding the use of the premises.