Does the Degree Wellness agreement require the Assignee to enter into a new franchise agreement?

According to Degree Wellness's 2025 Franchise Disclosure Document, the agreement does not always require the assignee to enter into a new franchise agreement. The franchisor, Degree Wellness, has the option to require the proposed new owner to either assume all of the existing franchisee's obligations under the current agreement or to execute a new franchise agreement. The decision to require a new agreement is at Degree Wellness's discretion.

This flexibility allows Degree Wellness to ensure that the new owner is fully committed to the brand standards and practices. Requiring a new agreement provides an opportunity to update the terms and conditions to reflect the current franchise model. It also allows Degree Wellness to incorporate any changes in fees, operational requirements, or other obligations that have been implemented since the original agreement was signed.

For a prospective franchisee looking to sell their Degree Wellness franchise, this means that the potential buyer might face different terms than what the original franchisee agreed to. The new owner may have to agree to updated standards, higher fees, or other changes that could affect the profitability and operation of the franchise. The original franchisee may also be required to guarantee the performance and obligations of the proposed new owner.

It is important for both the seller and the buyer to understand the implications of this clause. The seller should be aware that they might need to provide a guarantee for the buyer's performance. The buyer should be prepared to potentially enter into a new agreement with terms that are different from the original franchise agreement. Both parties should seek legal counsel to fully understand their rights and obligations in the transfer process.